NYSE eyes more stake in MCX, NSE

The NYSE Euronext is betting big on India. Not only does it intend to raise its stake in the National Stock Exchange (NSE) and the Multi Commodity Exchange (MCX) once foreign ownership rules are eased, but it also has plans to partner the two Indian bourses in developing their business.In the years to come, India could be one of the markets where the NYSE Euronext lists its shares, along with China and Japan, which are alos on the radar.

NYSE, a subsidiary of the NYSE Euronext, owns a 5 per cent stake in NSE, while the parent had earlier this year signed an agreement with MCX to acquire a 5 per cent stake in the commodity exchange (Related Story). The MCX deal is expected to be closed by June this year.

Read more in The Business Standard article.

NYSE, Nymex line up to buy stake in MCX

The New York Stock Exchange (NYSE) and the New York Mercantile Exchange (Nymex) are awaiting policy guidelines on foreign direct investment (FDI) in commodity exchanges to pick up minority stake in Multi Commodity Exchange of India (MCX). The guidelines may be announced on Friday.MCX, the largest commodity futures bourse, is promoted by the Mumbai-based Financial Technologies (FTIL).

When contacted an MCX spokesperson said that the exchange has been long awaiting the government policy on foreign investments. While the transaction value under discussion is not clear, sources say that it could be in line with the previous stake sale. Last week, FTIL offloaded around 10% stake in MCX. ICICI, IL&FS and Kotak acquired 3.55%, 5%, 1% stakes, respectively, at an enterprise value of $1.1 billion (around Rs 4,400 crore). With this, FTIL's holding in MCX has come down to 37.5%.

MCX and National Commodity & Derivatives Exchange (NCDEX), which run two leading national commodity bourses, have been pioneers in attracting foreign investors. While Fidelity had picked up 9% in MCX, Goldman Sachs had bought 8% in NCDEX. NCDEX had later sold 7% to Inter-Continental Exchange (ICE) as well.

Read more in The Economic Times article.

Larsen & Toubro plans to raise $700 million

India’s Larsen & Toubro Ltd has sought shareholder approval for raising up to $700 million (Rs2,800 crore), as the country’s largest construction and engineering firm expands its operations overseas.

The company said it wants to raise the money through issues that could include global depositary receipts (GDRs), American depositary receipts (ADRs), foreign currency convertible bonds or other equity related instruments.

It has also sought approval from shareholders at the firm’s annual general meeting on Friday to authorise the board to convert previously issued GDRs to ADRs and list at Nasdaq or the New York Stock Exchange.

Fin Tech buys 1% NSE stake for Rs 125cr

Software firm Financial Technologies India has acquired 4,50,000 shares (1%) stake in National Stock Exchange from ICICI Bank for Rs 125 crore.According to a release issued by Financial Technologies to the BSE today, the company joins other NSE shareholders including the New York Stock Exchange (NSE), Goldman Sachs, ICICI, SBI, IDBI, LIC and various public sector banks.

NYSE and three financial investors — General Atlantic, Goldman Sachs and Softbank Asian Infrastructure Fund — had picked up 5% stake each in NSE for $490 million (Rs 2,205 crore) in January this year.That had pegged the upper-end valuation of the country’s largest bourse at $2.5 billion (Rs 11,250 crore). NSE had recorded a net profit of Rs 191 crore on a revenue of Rs 472 crore for the financial year ended March 31, 2006.
With the current FT-ICICI Bank deal, the valuation of NSE has moved up to Rs 12,500 crore - an increase of around 11% in seven months.

DoT rules out BSNL-MTNL merger

The Department of Telecom (DoT) has ruled out the possibility of merging the two PSUs - BSNL and MTNL - on the grounds that MTNL is listed entity.Telecom Minister A Raja was recently apprised by DoT officials of this decision which says MTNL has private stakeholders who may not favour a merger with BSNL, official sources said.

While the government has 100% ownership in BSNL, MTNL has 56.25% government stake. MTNL is listed in the domestic market as well as on the New York Stock Exchange.The merger plan was first floated by late communications minister Pramod Mahajan and it was revived later by former minister Dayanidhi Maran.MTNL has minority shareholders/ADR holders whose approval for the merger decision is crucial.

After I-Sec submitted its report, the government was exploring the financial pros and cons of a reverse merger of BSNL with MTNL to take care of the private shareholders' interests.

A merger mode would necessitate a mandatory delisting of MTNL for a subsequent relisting of the combined BSNL-MTNL entity which would have been a complicated process for DoT to handle.

General Atlantic invests $60 mn in IBS Software

Private equity (PE) investor General Atlantic Llc. (GA), headquartered in New York, has stepped up its pace of dealmaking in the country. It has closed three deals worth more than $175 million (about Rs744 crore) in the first seven months of the year, including the $60 million investment in Thiruvananthapuram-based transportation and logistics software firm IBS Software Services that was announced on Wednesday. The change of pace, in terms of the number of deals, is significant when seen in the context of the six deals the $17 billion PE firm had concluded till December 2006, five years after it started investing here in 2002.

IBS marks GA’s ninth investment in India and its fourth in the information technology services sector. The firm has invested more than $700 million in the country till date and its largest investment here has been $250 million in Gurgaon-based business process outsourcing (BPO) firm Genpact Ltd in 2004 for a 30% stake. The BPO, which was spun off from General Electric Co., will make an initial public offering (IPO) on the New York Stock Exchange soon and expects to raise $731 million. GA is expected to partially exit Genpact at the time of the listing.

The PE investor has taken a minority stake in IBS Software Services, but the percentage was not disclosed. IBS Software Services plans to use the funding to boost its sales and marketing teams, increase its business consulting services and make two acquisitions in the US or Europe.

Read more in The Livemint article.

ICICI Bank, Sterlite mop up $4 bn from US in a week

Two Indian companies, including the country's largest private lender ICICI Bank, have raised over four billion dollars last week from the US market.ICICI Bank, in the biggest offering by an Indian company, raised $4.3 billion in a global follow-on issue, half of which was in the form of American Depository Shares.

The ADS issue of 42.14 billion, including a green shoe option of $0.32 billion, was priced at $49.25 each, translating into a price of about Rs 1,002.5 per equity share and representing a premium of about 6.6 per cent over the domestic issue price.Each ADS represents two equity shares of the Bank.

Earlier, Vedanta group's Sterlite Industries, a non-ferrous metal and mining firm, raised $1.75 billion through an initial public offering on the NYSE.Each ADS represents one equity share of the firm and the were priced at $13.44 each.

Combining ICICI Bank's 42.46 billion offer and 41.75 billion of Sterlite Industries India Ltd, the two firms have mopped up over four billion dollars from the US market.

Blackstone gets ready for public debut

Blackstone Group LP, the private-equity powerhouse that controls corporate names like Universal Studios Orlando and cable operator Adelphia Communications, is just hours away from finalising terms to bring the firm public.

The nation's second-largest buyout fund, run by billionaires' Stephen Schwarzman and Peter G. Peterson, will spend Thursday monitoring investor appetite for what will likely be one of the biggest initial public offerings in US history. The 17 investment banks underwriting the deal will spend most of the day trying to determine if there's enough demand for the stock to hike its offering price.

Blackstone's IPO is expected to raise between $3.87 billion and $4.14 billion, with shares expected to sell for $29 to $31 before they begin trading Friday on the New York Stock Exchange. If it comes in at the high end of the range, it will be the sixth-largest US offering of all time and the biggest in nearly five years, according to Renaissance Capital and IPOHome.com.

Read more in The Economic Times article.

Sterlite prices ADS offering at $13.44

Sterlite Industries, the flagship of the Vedanta Group, said on 19 June it has priced its initial public offering of American Depositary Shares (ADS) at $13.44 each.
Calculated on the basis of this price, Sterlite would raise over $1.75 billion through the issue of over 130 million equities in the form of ADS.

Post-offering, the ADS represent around 18.9% interest in Sterlite. The company’s ADSs were approved for listing on the New York Stock Exchange under the symbol “SLT”, Sterlite Industries said in a communique to the Bombay Stock Exchange.

After this offering, the company would have around 689 million equity shares. The company granted the representatives an option to purchase up to an additional 19.5 million ADS to cover over-allotments.

In May, Sterlite Industries announced plans to raise $2 billion through ADS issue for acquisitions, increasing stake in subsidiaries and setting up a thermal coal-based power facility in Orissa for around Rs8,730.5 crore.

Read more in The Livemint article.

Carlyle, Apax join race for Patni stake

A clutch of top private equity guns, including Carlyle and Apax Partners, have shown interest in buying a large stake in Patni Computers, but the success of their venture depends on whether they can win crucial management rights and also secure the co-operation of Narendra Patni, the CEO and chairman.
Mr Patni, who is believed to be interested in continuing in his position after the exit of his brothers, has employment contracts that protect his interests till 2013.

According to the prospectus filed with the Securities and Exchange Commission (SEC) prior to its ADR issue on the NYSE, Mr Patni’s (Narendra) term as the chairman of the board of directors of his company ends in December 2008. However, he still has the option to continue for another 5 years in the same position in Patni Computers. Also, since Mr Patni’s consultancy agreement has been extended by the board of directors, he would also be able to continue as the CEO of the company till 2010. This is crucial to any new investor for the company, as they then would have to strike some kind of a compromise with Mr Patni in order to run the company.

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.

NSE ranks as third-fastest growing bourse in the world

India's National Stock Exchange has emerged as the world's third fastest-growing bourse in terms of increase in listed companies, outpacing global names such as NYSE, Nasdaq and London Stock Exchange.

While NSE recorded a 15 per cent jump in the number of listed firms to 1,244 during the one-year period ended April 2007, Bombay Stock Exchange has consolidated its position as home to the maximum number of listed companies in the world.

NSE's 15 per cent growth is next only to 23.3 per cent growth at Poland's Warsaw Stock Exchange and 15.4 per cent for Malta Stock Exchange, data compiled by the World Federation of Exchanges (WFE) show.

The Mumbai-based bourse has added 160 companies to its listed universe from a total of 1,082 at the end of April 2006. Out of these, more than 60 companies have joined the bourse this year itself.

Read more in The DNA Money article.

The bourse has seen a whopping ten-fold surge in number of listed companies in nearly 13 years from about 100 firms in 1994-95, after it was recognized as a stock exchange under the Securities Contracts (Regulation) Act in April 1993.

Tatas in talks for stake in Visteon

Tata AutoComp Systems (Taco) and French auto parts maker Valeo are believed to be in preliminary stages of discussions to acquire a stake in NYSE-listed ailing automotive supplier Visteon Corporation.

Sources close to the development said the acquisition of a stake in Visteon, which was spun off from Ford Motor Company in 2000, would cost $1.5-2 billion.

For Taco, a 12-year-old company that is an original equipment supplier to major domestic and multinational car-makers, the acquisition has a strategic fit with its operations. The company has appointed a merchant banker and is awaiting clearance from Visteon to start due diligence.

Valeo is also exploring all options, including a leveraged buyout of Visteon.

Read more in The Business Standard article.

Sterlite to raise $2 bn for power plant

Sterlite Industries (India), a unit of billionaire Anil Agarwal’s Vedanta Resources, plans to raise as much as $2 billion in its first share sale in the US to pay for a new power plant.

Sterlite, India’s largest copper producer, would sell shares that will trade on the New York Stock Exchange, the company said in a filing to the Securities & Exchange Commission.

By building a power plant, Agarwal is starting his second new venture three weeks after agreeing to pay $1.4 billion for 71 per cent of India’s biggest non-state iron-ore exporter. The response to the stock sale may show if he can achieve the goal of becoming one of the world’s top-five metals and mining companies.

Vedanta Resources, which owns 72 per cent of Sterlite, last month defeated rivals including Arcelor Mittal to buy Sesa Goa. The takeover gave the company its first iron ore mine in India, where steel demand is growing at almost twice the global average fuelled by the world’s second-fastest pace of growth.

Read more in The Business Standard article.

TCS looks at foreign listing

Tata Sons, the holding company of the Tata group, is considering a $1 billion-plus (over Rs 4,300 crore) overseas equity sale in Tata Consultancy Services (TCS) this year to fund acquisitions of other entities.

Banking sources said the equity offer may take place in six months and include a fresh share offer as well. The group is examining the pros and cons of listing on the major exchanges, including London, Luxembourg and New York stock exchanges.

A listing on the New York Stock Exchange, where other software giants – Infosys, Wipro and Satyam — are listed, gets immediate attention from global brokerages. But the flip side is the time-consuming compliance norms under the Sarbanes-Oxley regulations.

Bankers said raising funds through an equity sale in TCS makes sense as Tata Sons holds a 78.35 per cent stake in the country’s largest software company. As a policy, Tata Sons chips in with funds whenever any group entity makes a major acquisition.

For instance, Tata Sons is expected to contribute to Tata Steel’s $12.15 billion purchase of Anglo-Dutch steel company Corus, although a major chunk of the money will be raised through debt.

Read more in The Business Standard article.

Genpact eyes $600-million US listing

Genpact, one of the country's largest business process outsourcing firms, is mulling a US listing through an initial public offer to raise over $600 million for the company and its promoters.

The company is planning to sell about 15% equity through a public float on either Nasdaq or New York Stock Exchnage later this year, merchant banking sources said.The company's major shareholders — GE and US-based private equity giants Oakhill Capital and General Atlantic — are likely to sell part of their holding through this IPO, which could value the firm at around $4 billion.

Genpact has appointed three US-based investment banks — Morgan Stanley, JPMorgan and Citigroup — for the IPO and it may file the regulatory prospectus in the next few weeks, to be followed with a listing later this year.

Read more in The Times of India article.