25 foreign investors line up for UTI AMC stake

Private equity firm Blackstone, Goldman Sachs, UBS, Citigroup, National Australian Bank and Shinsei Bank are likely bidders for an equity stake in India’s oldest fund house, UTI Asset Management Company (UTI AMC).

Close to 25 overseas institutional investors have evinced interest in picking up a stake in the country’s third largest mutual fund. UTI AMC plans to offload 20% stake through a private placement and 29% through an initial public offer. However, no single investor would be able to hold more than 5%.

The private placement is expected to be completed by January while the initial public offer is slated for February-March. The listing process has to be completed before March 31, 2008. The fund house could raise about Rs 6,000-8,000 crore through the combination of private placement and initial public offer.

Read more in The Economic Times article.

UBS, ICICI offload Deccan Aviation stake

UBS Securities, ICICI Ventures and ICICI Bank today sold a part of their shareholding in Deccan Aviation, owner of the low-cost Air Deccan airline.In a series of bulk deals, Money Matters bought all the shares sold by the three entities for nearly Rs 102 crore.

While UBS Securities sold 1.79 per cent stake, ICICI Ventures offloaded 2.31 per cent stake. ICICI Ventures holds shares in Air Deccan through Western India Trustees and Executor Company. ICICI Bank sold 0.91 per cent stake.Prior to the sell-of ICICI Ventures held 6.78 per cent stake, UBS had 2.53 per cent and ICICI Bank 1.05 per cent.

ICICI Bank and UBS sold the Deccan shares at Rs 150 each, and ICICI Ventures sold the shares at Rs 149.96 each.ICICI got Rs 46.9 crore from the sale, UBS got Rs 36.5 crore and ICICI Bank Rs 18.6 crore.

The sale has happened at a time when Vijay Mallya’s UB Group is scaling up its shareholding in Deccan Aviation through a 20 per cent open offer. Priced at Rs 155 a share, the offer was triggered with the Kingfisher group acquiring a 26 per cent stake in the airline. The offer will close on October 1.

Future Capital IPO Decided; Pantaloon To Invest Rs 325 Crore In Future Ventures

Future Capital Holdings, the financial arm of the Kishore Biyani-owned Pantaloon Retail, is tapping capital market to raise funds. The board of directors of Pantaloon Retail has taken a decision to go public. Pantaloon Retail owns 74 per cent stake in Future Capital, while a 10 per cent stake is held by hedge fund Och-Ziff Capital, and the rest by employees including CEO Sameer Sain.

At a meeting held on Saturday, the board of Pantaloon Retail decided that the IPO of the Future Capital holdings Ltd would seek to sell 10 per cent of the post issue capital. The company has made a stock exchange announcement today to this effect. UBS Investment recently valued the business of Future Capital to be around Rs 3,000 crore.

Future Capital operates four private equity funds - Kshitij ($850 million domestic real estate fund), Horizon ($350 million international real estate fund); IndiVision Capital ($400 million consumer sector private equity fund), besides a $350-million private equity fund. Future has also launched a consumer credit business.
The board has also approved an investment of Rs. 325 crore in Pantaloon Future Ventures Ltd, a wholly owned subsidiary of the company for making downstream investment into Future Ventures India Ltd. which has been set up to undertake new businesses, incubation of new ideas and businesses and getting into joint ventures, the stock exchange announcement said.

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.

IDFC selling shares to mop up $500 mn

Infrastructure Development Finance Co. (IDFC), India’s biggest financier of public works, is selling $500 million (Rs2,050 crore) of shares to institutional investors, three people with knowledge of the matter said.

The sale, which began on Monday, will close on Wednesday and shares will be priced on 5 July, said the people, who declined to be identified before an announcement. The shares are being sold by auction or through book building, the people said.

“Several infrastructure projects will need large investments as India aims to increase its growth rate,” said R.K. Gupta, who manages Rs350 crore at Credit Capital Asset Management in Delhi and owns IDFC shares.

IDFC’s share sale follows a $5 billion offering by ICICI Bank Ltd, India’s biggest by market value, in June. The Mumbai-based company is raising money to meet demand for funds to build roads, ports and power plants in the world’s fastest growing major economy after China.

Citigroup Inc. and UBS AG are helping the lender sell the shares to banks, mutual funds, insurance companies and other big investors, according to a filing with the National Stock Exchange.JM Financial Consultants Ltd and Kotak Mahindra Capital Co. are also involved in the sale, the filing said.

Read more in The Livemint article.

Spice Communications raises $128 mn from public issue

Spice Communications Ltd, an Indian mobile phone venture partly owned by Telekom Malaysia Bhd., raised Rs520 crore ($128 million) in an initial public offering as investors try to tap a market whose numbers almost doubled in 2006.

The Noida-based company priced the 113.1 million new shares at Rs46 apiece, the top end of a Rs41-46 range, according to an email sent to investors. The stock will trade on the Bombay Stock Exchange.

The mobile operator and larger Indian rivals, led by Bharti Airtel Ltd and Reliance Communications Ltd, are attracting investors trying to get access to the world’s fastest-growing market last year. Spice, which offers its services in the southern state of Karnataka and Punjab in the north, plans to spend $140 million during the next two years to boost coverage.

Last month, Spice sold stakes worth $10.1 million each to Lehman Brothers Holdings Inc. and Spinnaker, the company said.Enam Financial Consultants Pvt. Ltd and UBS AG arranged the Spice share sale.

Read more in The Livemint 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.

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.

Spice Comm IPO opens today

Spice Communications Ltd’s initial public offer opens on Monday. The company is offering 11.31-crore equity shares of Rs 10 each through the 100% book building route. The price band has been fixed between Rs 41 and Rs 46 per share. The issue constitutes 16.39% of the fully diluted post-issue equity share capital of the company.

The book running lead managers to the issue are Enam Financial Consultants and UBS Securities India.The issue closes Friday.At least 60% of the issue will be allocated to qualified institutional buyers, up to 30% to retail investors and up to 10% to non-institutional investors.

The IPO proceeds will be mainly utilised towards repayment of debt, payment of license fee for national long distance and international long distance services and related capital expenditures. The funds will also be used for payment to vendors for network equipments and other capital expenditures.

The company recently concluded a pre-IPO placement of 2.4 crore shares at Rs 45 per share, raising about Rs 112 crore. Lehman Brothers and Sinnaker Investments have picked up a small stake in Spice Telecom.

Read more in The Economic Times article.

Ruias to raise $900 m to fund Algoma buy

Essar Global, the international holding company for the Ruias, will raise $900 million through a combination of senior notes and loans to fund its acquisition of Canada’s Algoma Steel, sources said.

The non-recourse fund raising exercise by Essar Global is the second-largest such transaction by an Indian steel company, after Tata Steel’s almost $7 billion loan to finance its acquisition of Anglo-Dutch steelmaker Corus.

The Ruias’ international holding company had acquired Algoma in April for $1.58 billion in an all-cash leveraged buyout that is likely to pitchfork the Essar group with the Tatas in North America. Essar Global’s acquisition is considered the second biggest by an Indian company in North America, after Hindalco paid $6 billion to buy Atlanta-based Novelis in February. To finance its Algoma acquisition, Essar Global will sell $450 million of senior notes, recoursed to the Canadian company’s balance sheet, according to sources. The eight-year notes, denominated in dollars, may yield 9.75% to 10%. UBS is the financial advisor to the offer.

Essar Global also plans to issue $450 million in loans, based on Algoma’s earnings. The group’s own contribution will be about $500 million. It could not be ascertained how the rest of the acquisition amount — about $100 million — will be raised.

Read more in The Economic Times 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.

Lazard may float MF

The UK-based investment bank, Lazard Group, is likely to enter the Indian asset management business through Lazard India, joining the likes of JP Morgan, AIG, UBS and Dawnay Day, which have entered the booming Indian mutual fund business in recent months.

Lazard India was set up by international banker Udayan Bose and is now a full-owned subsidiary of Lazard, UK, after Bose sold his stake in 2004.

Lazard India CEO and Managing Director K Balakrishnan said, “We are very opportunistic and keep evaluating options. India is a good market and we will enter the asset management space in India at the right time.”

According to a recent Thomson Financial report, Lazard is among the top 10 financial advisors and was involved in 5 deals in India. Globally, its asset management business provides investment management and advisory services to institutional clients, financial intermediaries, private clients and investment vehicles.

Read more in The Business Standard 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.

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.

FinMin clears FDI in BSE, UBS, others

The government today cleared UBS India's plans to acquire domestic NBFCs as part of approval granted to 23 Foreign Direct Investment (FDI) proposals involving investments of Rs 418.33 crore.

The proposals approved by Finance Minister P Chidambaram will allow UBS (India) to acquire shares of the existing non-banking finance companies (NBFCs) with an estimated investment of Rs 224 crore.

These proposals were recommended by FIPB for approval by the Finance Minister, an official statement said.

The minister also approved the proposal of four foreign investors to pick stake in the Bombay Stock Exchange at an investment of Rs 13 lakh. Consequent to this, FDI in BSE could go up to 16%.

Read more in The Business Standard article.

EDS to buy RelQ Software for nearly $40mn

Electronic Data Systems (EDS), a $21 billion global software services major, has signed a definitive agreement to acquire Bangalore-based software testing firm RelQ Software.According to a statement from EDS, over time, RelQ will be fully integrated into EDS' global testing organisation and will accelerate EDS' global testing capabilities. The transaction is expected to close in May 2007.

RelQ Software is a 700-people strong organisation, with revenues at around $22 million last year. According to industry estimates, the company is expecting to close the fiscal with $30 million in revenues. EDS is understood to have paid around $40 million (around Rs 180 crore) to acquire this firm. No confirmation on this was available from EDS as no financial terms of the transaction were disclosed. UBS advised RelQ on the transaction.

Read more in The Business-Standard article.