OVL to go ahead with the acquisition Imperial Energy

The union cabinet has accorded its approval to ONGC Videsh Ltd, the overseas investment arm of ONGC, India's largest oil explorer, to go ahead with the acquisition of UK-listed Imperial Energy.

The cabinet committee on economic affirs met Tuesday morning to approve the deal. There is no official word on the government's decision as yet. People who are in the know of the deal said that the cabinet clearance was taken so that OVL could meet the Tuesday midnight deadline set by UK authorities.

This would pave the way for OVL to make the open offer to the UK listed shareholders. The $2.1 billion deal will be one of the bigger deals by ONGC in recent times Imperial Energy has oilfields in Russia. OVL had sought to delay making the open offer but the request was rejected by the Takeover panel on Monday.

Analysts say the deal works out to around $2 to $2.5 a barrel for OVL given Imperial's declared reserves of 900 million barrels and will help improve India's energy security. India meets almost 70% of its oil demand through imports.ONGC is being advised by Deutsche Bank. Merrill Lynch is advising Imperial.

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OVL may make ‘firm’ offer to Imperial soon
Imperial Energy has choosen OVL over Sinopec

Merrill Lynch sells stake in Religare

Merrill Lynch has sold its nearly 5% stake in financial services company Religare Enterprises,promoted by Malvinder and Shivinder Singh for an undisclosed sum.Last November Merrill Lynh had bought a 5.56% stake in Religare as part of a pre-initial public offering (IPO) placement.

The one-year lock-in period expired last month, and Merrill Lynch has since sold its post-IPO stake of 4.97%. The buyers of the stake or the price at which it changed hands were not immediately known, although a Religare official said the sale happened last week.

Based on Religare’s average stock price of Rs 299 last week, Merrill Lynch could have cashed out for Rs 113.6 crore, generating a return of 87.5% in one year. Merrill had acquired 5.56% stake in Religare for Rs 60.6 crore last October through its wholly-owned subsidiary Indopark Holdings.

Despite the stock market crash, the scrip is trading much above its IPO issue price of Rs 185. The stock had shot up after listing to touch Rs 729 on the NSE. Promoters currently hold 54% stake in the company.

TCS to buy Citigroup Global Services for $505mn

Tata Consultancy Services (TCS) signed an agreement with Citigroup Inc to acquire its captive BPO-Citigroup Global Services (CGSL) for $505 million (around Rs 2,424 crore) in an all-cash transaction. In addition to the sale, Citi has signed an agreement with TCS to provide, through CGSL, process outsourcing services to Citi and its affiliates in an aggregate amount of $2.5 billion over a period of 9.5 years.

The acquisition broadens TCS’s portfolio of end-to-end IT and BPO services in the global Banking and Financial Services (BFS) sector.TCS has provided IT services to Citi since 1992 and is currently one of the largest IT services partners for Citi, delivering IT and business processing outsourcing services to Citi across its operations in North America, Europe, India, Japan, Singapore and the rest of Asia Pacific.The parties expect to close the transaction in the fourth quarter of 2008. Merrill Lynch acted as advisors to TCS in this transaction.

Bank of America to buy Merrill for $50 bn

Bank of America Corp said it agreed to buy Merrill Lynch & Co Inc in an all-stock deal worth $50 billion, snagging the world's largest retail brokerage after one of the worst-ever weekends on Wall Street.Bank of America now has one of the best and largest retail brokerages in the country, one of the top investment banks in the world, and a large stake in one of the best investment managers in the world.

The bank is buying about $44 billion of Merrill's common shares, as well as $6 billion of options, convertibles, and restricted stock units.Bank of America agreed to pay 0.8595 shares of Bank of America common stock for each Merrill Lynch share. The price is 1.8 times stated tangible book value.The bank also said it expects to achieve $7 billion in pretax expense savings, fully realized by 2012, and expects the deal to be accretive to earnings by 2010. The transaction is expected to close in the first quarter of next year.

The price, which comes to about $29 per share, represents a 70 percent premium to Merrill's share price on Friday, although Merrill's shares were trading at $50 in May and over $90 at the beginning of January 2007.The deal has been approved by directors of both companies. Three Merrill directors will join the Bank of America board.

Read more in The Economic Times article.
Chronology: History of Merrill Lynch

Merrill pumps in Rs 300 crore into logistics JV

Merrill Lynch, one of the world’s leading wealth management, capital markets and advisory companies has invested close to Rs 300 crore to set up a joint venture company with the DRS Group, a Third Party Logistics (3PL) company based out of New Delhi. The new entity, DRS Warehousing Corporation, will build and operate eight warehouses located in various parts of the country.

The DRS Group is expected to get a 30% stake in the JV, while Merrill Lynch will hold the remaining stake. According to sources, each warehouse will be more than 2,00,000 sq feet and four warehouses will see a completion target before December, 2008.

This is a significant development, considering investors and 3PL companies are investing heavily in warehousing. By 2008, 3PL service providers, with the likes of TNT, Transport Corporation of India, Blue Dart, Gati and Safexpress, are looking at creating more than 25 million sq ft of warehousing space in India.

Read more in
The Economic Times article.

Merrill hikes stake in Vakrangee to nearly 8%

Merrill Lynch has increased its stake in Vakrangee Software, an integrated document management and printing management solutions provider, to 7.72%. The total FII holding in Vakrangee Softwares is now 39.49%.

Dinesh Nandwana, chairman and managing director, Vakrangee Software, said: "With our strong positioning in the government and e-governance sector, we are also successfully tapping private and high growth sectors like telecom, insurance, financial services and retail. We have also ramped up our capacity by placing order on Eastman-Kodak for the acquisition of a state-of-the-art variable data digital colour printing facility to increase output from 2.4 million pages per day to 4.8 million pages per day."

Vakrangee reported a 107% increase in net profit at Rs 13.53 crore for the quarter ended December 31, 2007 when compared with Rs 6.54 crore in the corresponding quarter last year.

Merrill Lynch may pick 20% stake in Sharekhan

Private equity(PE) investor Citigroup Venture Capital (CVC) is diluting a part of its 75% stake in brokerage firm Sharekhan. Financial services major Merrill Lynch is said to be the front-runner to pick a minority stake even as other PE firms, including Baring Private Equity, are believed to be in the race.

The industry buzz is that the deal for 20% stake is valued at around Rs 300 crore. However, a source close to Sharekhan said CVC is looking to dilute its stake only by 10% and the deal value is close to $50 million or Rs 200 crore.

This will put Sharekhan’s total value at Rs 1,500-2,000 crore, a jump of around 100% in seven months. CVC along with IDFC had picked 85% in Sharekhan in May this year for Rs 650-700 crore, pegging the valuation at around Rs 800 crore.

Read more in The Economic Times article.

Merrill Lynch buys 13% in mining co

Merrill Lynch International has picked up a 12.74% equity stake in mining firm Resurgere Mines & Minerals India for an undisclosed amount. Formerly known as Exfin Shipping (India), Resurgere has interests in extracting, processing and selling mineral products and also in exploration and development of mining assets.

In a bid to fund the purchase of plant and machinery to set up its extraction and crushing facilities at mines, it is in the process of tapping the capital markets. The company also plans to buy railway rakes to set up its logistics infrastructure facilities from the capital raised.

Resurgere currently operates in Kendujhargarh and Mayurbhanj districts of Orissa and has plans to start operations in Jharkhand’s Singhbhum district soon. It has entered into an arrangement with a leaseholder in a mining area in west Singhbhum district for mining iron ore and supplying the entire production.

All three mines carry high-quality iron ore of about 62-64% ferrous content. Resurgere sells most of its products domestically, except for iron ore fines, which it exports to China.

DLF offloads 49% in 8 housing projects

DLF, the country’s largest real estate developer by market value, today said that it has sold 49 per cent stake in eight residential projects to private equity players for Rs 1,675 crore.

The development takes place five months after the company raised over Rs 9,000 crore from its initial public offering.

The realty firm has sold the stake in seven residential projects to a Merrill Lynch entity for Rs 1,480 crore, making this as one of the largest foreign direct investments in the Indian real estate sector.

These housing developments, classified as mid-income by the company at a price point of Rs 55 lakh an apartment, are located at Chennai, Bangalore, Kochi and Indore. All these projects are expected to be developed in about seven to eight years.

DLF has also sold 49 per cent stake for Rs 194 crore to Brahma Investments in another residential project at Panchkula, Haryana.

Read more in The Business standard article.

Merrill arm buy 5% in Religare

Global financial services player Merrill Lynch has bought a five per cent stake in Religare Enterprises, a Delhi-based financial services-cum-brokerage outfit, for about Rs 60 crore through its subsidiary Indopark Holdings.

The deal values Religare Enterprises, which has filed a draft document for an initial public offering (IPO), at about Rs 1,212 crore. The IPO is likely to hit the market by this month-end.

Indopark Holdings will get 37,88,050 shares post-IPO and these shares will have a lock-in period of one year, as stipulated by the Securities and Exchange Board of India (Sebi) rules.

Religare Enterprises, which is promoted by the Ranbaxy group founders, is planning to raise close to Rs 150-160 crore through the IPO.Religare Enterprises is the holding company for all its businesses, with its subsidiaries, Religare Securities, Religare Wealth Management Services, Religare Capital Markets and Religare Insurance Broking, among others.

Merrill Lynch, Citigroup buy 10% in MCX

Global financial services firms Merrill Lynch and Citigroup have picked up five per cent stake each in the country's biggest commodity exchange MCX for a total of about Rs 480 crore.

Financial Technologies (India) Ltd, the parent company of Multi Commodity Exchange of India, sold the stake. FTIL has also entered into agreements to offload three per cent and two per cent stake to two foreign funds - Passport India Investment (Mauritius) and GLG Financials Fund, respectively.The transactions put the enterprise value of MCX at over USD 1.1 billion (Rs 4,400 crore).

FTIL will get about Rs 720 crore from selling 15 per cent stake in MCX, an exchange official said. With the sale, FTIL's shareholding in MCX will come down to 49 per cent, he added.

Read more in The Economic Times article.

Gemini Communication close to SE Asia acquisition

Network services firm Gemini Communication Ltd. is close to making an acquisition in South-East Asia, a top company official said on Wednesday.

"We are in serious talks with a company in South-East Asia and we will shortly be closing out a deal," Chairman and Managing Director R. Vijaykumar told the media.

The company has set aside 4.5 million euros for the acquisition. The acquisition would be either in the wireless networking or radio frequency identification space, he said.

Recently the company raised 15 million euros from Merrill Lynch International through issue of convertible bonds, which would give the foreign fund a stake of 15 per cent in Gemini upon conversion.

Credit Suisse wins merchant banking licence

Credit Suisse, one of the world's top investment banks, said on Wednesday it had obtained its Indian merchant banking licence, allowing it to underwrite domestic stock and bond deals in the booming market.

Credit Suisse, which hired V. Anantharaman to lead its Indian investment banking team in October, launched its domestic brokerage operations in March 2007.The firm was hit with a two-year securities trading suspension in India in 2001, with domestic regulators alleging it had violated rules on price manipulation.

Credit's Suisse's licence comes at a time when rivals like Goldman Sachs, Merrill Lynch and Morgan Stanley are expanding their Indian operations to take advantage of booming cross-border M&A deals and securities issuance.

Those three firms have all recently detached from their local partners to go it alone in the market, while firms like Lehman Brothers are building up their franchises, leading to a war for talent in the banking sector.

Read more in The DNA Money article.

Indiabulls Real Estate raises $400mn via GDRs

Indiabulls Real Estate (IREL), Delhi-headquartered property developer, has raised $400 million selling global depository receipts (GDRs), just over three-months after it was separated from parent Indiabulls Financial Services.

The GDRs were priced at $10.32 apiece (nearly Rs 412), a discount of Rs 41 (about 9%) a share compared to the prevailing share price of Rs 452.95 on the Bombay Stock Exchange today.The money raised by IREL includes $40 million from an over-allotment option as demand outstripped supply.

In May, group company Indiabulls Financial Services raised $275 million through a GDR issue.

Merrill Lynch & Co was the sole book-runner for the GDR. The fundraising by Indiabulls Real Estate comes at a time when a slew of Indian real-estate developers are tapping the domestic and overseas markets to develop projects in world’s second-fastest growing economy.

Read more in The Business Standard article.

IVRCL Infrastructure proposes Rs2,000 cr IPO for realty arm

IVRCL Infrastructures & Projects Ltd, the Hyderabad-based infrastructure company, plans to go in for an initial public offering (IPO) for its real estate subsidiary IVR Prime Urban Developers Ltd to raise Rs2,000 crore, in continuation of a trend of real estate firms tapping the capital market—DLF Ltd’s Rs9,187 crore IPO, in early June, was oversubscribed 3.5 times. Another developer, Housing Development and Infrastructure Ltd, is seeking to raise Rs1,485 crore through an IPO that is already oversubscribed and which closes on Tuesday.

IVR Prime is in the business of constructing urban infrastructure, typically residential apartments and hotels. “We have certain plans for our real estate arm. In order to realize those plans, we have to raise money,” added Ramachandran. IVRCL Infrastructures, which has an 80% stake in IVR Prime, plans to dilute 20% of its holding in the IPO; the balance 20% is held by the family of the company’s promoter, Sudhir Reddy. Foreign institutional investors such as Citigroup, HSBC, Merrill Lynch, Goldman Sachs and UBS Securities together hold a majority 87.5% stake in IVRCL Infrastructures.

Read more in The Livemint article.

Merrill, UBS may help HDFC Bank overseas

HDFC Bank Ltd, India’s third biggest by market value, may hire Merrill Lynch & Co. and UBS AG to help raise $690 million (Rs2,829 crore) selling shares to overseas investors, two people with knowledge of the matter said.

The bank is likely to sell the shares in July, they said, declining to be identified before an announcement.HDFC Bank had on 17 May said it planned to raise Rs4,200 crore, including the sale of Rs1,390 crore to its founder, Housing Development Finance Corp. Ltd (HDFC), to fund accelerating demand for loans.

“Stronger banks out of India which want to raise capital will get good demand and investors will also make a good return,” said Sandip Sabharwal, who manages $245 million in equities as chief investment officer at JM Financial Mutual Fund in Mumbai.

Indian banks, led by ICICI Bank Ltd, are selling shares to fund growing demand for credit in an economy which has expanded an average of 8.6% in the past four years, trailing only China among the world’s major economies.

New loans grew by 28% in the year to March, slowing from 35% as the central bank raised rates to contain inflation.Mark Panday, a UBS spokesman based in Hong Kong, declined to comment. Rob Stewart, a Hong Kong-based spokesman for Merrill Lynch, also declined to comment, as did Neeraj Jha, a Mumbai- based spokesman for HDFC Bank.
HDFC Bank’s sale of shares to HDFC will enable the founding company to maintain its shareholding at about 23%, the bank had said on 17 May.

Read more in The Livemint article.

Omaxe to raise upto $400 mn in July IPO

Indian developer Omaxe Ltd. plans to raise $300 million to $400 million (Rs1,633 crore )through a domestic IPO in July, according to a term sheet distributed on 13 June, testing investor demand for Indian property companies.

Omaxe’s sale of nearly 18 million shares will come on the heels of rival developer DLF Ltd., which is raising $2.4 billion, India’s largest IPO ever. It was fully subscribed a day after it opened to institutional investors on 11 June.

Omaxe filed for an IPO in December with a fund-raising target of $339 million, but media reports earlier this year suggested the deal would be closer to $200 million because of weak Indian stock markets and concern over domestic land valuations.

Omaxe had sales of about $400 million in 2006, and the company is selling 10.3% of its equity, with a greenshoe over allotment option of 1.75 million shares, the term sheet said.Citigroup , Merrill Lynch and UBS are joint bookrunners for the deal, the term sheet said.

Read more in The Livemint article.

HDFC Bank to raise $688 m via ADRs

HDFC Bank will raise the entire Rs 2,810 crore (around $688 million) of its fresh public issue of equity through American Depository Receipts (ADRs). The bank is looking at raising Rs 4,200 crore (over $1 billion) of additional share capital, of which over a quarter will be raised through a preferential issuance to HDFC. The top three private sector banks — ICICI Bank, HDFC Bank and UTI Bank — are looking at raising around $7 billion in equity over the next couple of months.

ICICI Bank is looking at raising $5 billion, of which around half will be raised from the overseas market. It is likely to hit the market in the latter half of this month. UTI Bank is also looking at raising around $1 billion, of which around Rs 1,754 crore will be through a preferential issue to the promoters while the remaining Rs 2,326 crore will be through a global depository issue.

HDFC Bank is likely to hit the market before the end of July. The bank, according to sources, is likely to appoint Merrill Lynch and UBS as lead managers for the issue. A final decision will be taken in the next couple of weeks when it has to file under SEC guidelines.

Read more in The Economic Times article.

Sterlite`s $2 bn ADS to list in mid-June

Sterlite Industries is set to list its $2 billion (Rs 8,000 crore ) American Depository Shares (ADS) issue, the largest by any Indian company, with the New York Stock Exchange by the middle of this month.

Sources close to the development said the company would list the shares in the week beginning June 18. Road-shows for the issue, which will part-finance its plan to set up a power plant at an investment of Rs 12,500 crore, will begin towards the end of this week.

A team comprising Sterlite executives and representatives of its banks will visit Europe, the US, Hong Kong, Singapore and Japan to sell the issue. Merrill Lynch, Citi, Morgan Stanley and Nomura are bankers to the issue.

They added that the company would sell 125 million ADS under the book-built issue with a minimum price of Rs 531.84. The issue has the option to sell an additional 18.75 million shares, or 15 per cent of the issue, depending on the response.

Read more in The Business Standard article.

ICICI Bank raises 350 mln pounds in bonds

India's second largest lender, ICICI Bank , said on Saturday it has raised 350 million pounds through sterling-denominated bonds at a price of 83 basis points above UK government bonds. The three-year, fixed-rate bonds were raised by the Bahrain branch of the bank, a bank spokesman said on Saturday.

A source on Friday told Reuters the offering was managed by Deutsche Bank , Citigroup , BNP Paribas and HSBC.ICICI also aims to raise $5 billion in a new share sale in June for which it has mandated Goldman Sachs and Merrill Lynch .