News
AIRTEL EYEING VIETNAM, NO BUYOUTS
Bharti Airtel, India’s largest mobile operator, is exploring the possibility of launching operations in Vietnam. According to a company executive, Bharti would not be looking to buyout or pick up stake in existing Vietnamese companies, but was only considering setting up a greenfield company there.
Vietnam’s telecom sector was recently opened up following its accession to the WTO and this has resulted in numerous global telecom majors rushing in to set up JV operations here. Under Vietnamese law, foreign operators can own only 49% stake in telecom companies till 2010, and after this period the country will allow entirely-owned foreign firms. UK’s Vodafone, France Telecom and Norway’s Telenor have all recently opened offices in Vietnam to explore opportunities of setting up operations here.
Vietnam is considered as one of the world’s fastest growing mobile markets. The country that has a population of about 85 million has about 25 million mobile subscribers. Its telecom sector is registering a record annual growth of 30% plus. Vietnam already has six mobile operators but it is the three government-operated firms –-VinaPhone, MobiFone and the military-owned Viettel, which are the major players.
The Vietnamese government is also set to offload 49% stake in Vinafone and Mobifone soon.
Bharti Airtel is currently looking for opportunities across the world. The company is learnt to be in the race to pick up 51% stake in Telkom Kenya and has also been shortlisted by the Qatar government along with 10 other global majors for the second mobile phone licence in the West Asian country.
Bharti has also bagged the licence to become Sri Lanka’s fifth GSM operator and is slated to begin operations in the island nation by the year end. The company, which lost out in Kenya, Bhutan and Saudi Arabia, also offers comprehensive telecom services in Seychelles under the Airtel brand since 1998. Recently, Bharti (jointly with Vodafone) also launched 2G and 3G services in Jersey and Guernsey in Europe.
Vietnam’s telecom sector was recently opened up following its accession to the WTO and this has resulted in numerous global telecom majors rushing in to set up JV operations here. Under Vietnamese law, foreign operators can own only 49% stake in telecom companies till 2010, and after this period the country will allow entirely-owned foreign firms. UK’s Vodafone, France Telecom and Norway’s Telenor have all recently opened offices in Vietnam to explore opportunities of setting up operations here.
Vietnam is considered as one of the world’s fastest growing mobile markets. The country that has a population of about 85 million has about 25 million mobile subscribers. Its telecom sector is registering a record annual growth of 30% plus. Vietnam already has six mobile operators but it is the three government-operated firms –-VinaPhone, MobiFone and the military-owned Viettel, which are the major players.
The Vietnamese government is also set to offload 49% stake in Vinafone and Mobifone soon.
Bharti Airtel is currently looking for opportunities across the world. The company is learnt to be in the race to pick up 51% stake in Telkom Kenya and has also been shortlisted by the Qatar government along with 10 other global majors for the second mobile phone licence in the West Asian country.
Bharti has also bagged the licence to become Sri Lanka’s fifth GSM operator and is slated to begin operations in the island nation by the year end. The company, which lost out in Kenya, Bhutan and Saudi Arabia, also offers comprehensive telecom services in Seychelles under the Airtel brand since 1998. Recently, Bharti (jointly with Vodafone) also launched 2G and 3G services in Jersey and Guernsey in Europe.
RBI TO ALLOW FOREIGNERS TO USE BONDS AS COLLATERALS
The Reserve Bank of India will allow clearing houses of stock exchanges to accept foreign securities as collateral from overseas investors who want to invest in the derivatives segment of the Indian equities market.
In a notification posted on its Web site late on Thursday, the Reserve Bank of India (RBI) has asked clearing houses to open electronic holding accounts with foreign depositories to hold foreign securities offered by overseas investors as collateral.
Analysts said it appeared to be a move to ease some upward pressure on the rupee that would also make it easier for foreign investors, as they can now use foreign bonds rather than cash as collateral.
"If the margining requirement goes up or more collateral was needed, foreigners had to bring in more dollars, which in turn leads to more appreciation pressure," a local analyst said.
The rupee was quoting at 40.31/32 on Friday, just just below a nine-year high of 40.28 per dollar it hit in May. It has gained more than 9.5 per cent against the dollar so far in 2007 to be Asia's best-performing currency.
The rupee's rise has hurt exporters margins, prompting the government to announce steps including interest rate cuts and tax breaks for exporters. The RBI has asked clearing houses to report their balances of foreign securities held as collateral on a monthly basis.
In a notification posted on its Web site late on Thursday, the Reserve Bank of India (RBI) has asked clearing houses to open electronic holding accounts with foreign depositories to hold foreign securities offered by overseas investors as collateral.
Analysts said it appeared to be a move to ease some upward pressure on the rupee that would also make it easier for foreign investors, as they can now use foreign bonds rather than cash as collateral.
"If the margining requirement goes up or more collateral was needed, foreigners had to bring in more dollars, which in turn leads to more appreciation pressure," a local analyst said.
The rupee was quoting at 40.31/32 on Friday, just just below a nine-year high of 40.28 per dollar it hit in May. It has gained more than 9.5 per cent against the dollar so far in 2007 to be Asia's best-performing currency.
The rupee's rise has hurt exporters margins, prompting the government to announce steps including interest rate cuts and tax breaks for exporters. The RBI has asked clearing houses to report their balances of foreign securities held as collateral on a monthly basis.
DLF TO LIST ON JUNE 5
Realty major DLF, which raised over Rs 9,000 crore from its initial public offer, would list its shares on the bourses on July 5.
Shares of DLF would be listed and admitted for trading at the exchange from July 5, an NSE circular said.
The company had fixed the issue price at Rs 525 a share. The price band was Rs 500-550 per share.
The proceeds of the issue, which got oversubscribed 3.5 times, would be deployed to meet costs of construction, land acquisition and repayment of debt.
Global financial firm Merrill Lynch Capital Market holds 1.26 per cent stake in DLF.
DLF is planning to set up 35-40 new movie screens across the country with an investment of about Rs 160 crore over the next two years.
Shares of DLF would be listed and admitted for trading at the exchange from July 5, an NSE circular said.
The company had fixed the issue price at Rs 525 a share. The price band was Rs 500-550 per share.
The proceeds of the issue, which got oversubscribed 3.5 times, would be deployed to meet costs of construction, land acquisition and repayment of debt.
Global financial firm Merrill Lynch Capital Market holds 1.26 per cent stake in DLF.
DLF is planning to set up 35-40 new movie screens across the country with an investment of about Rs 160 crore over the next two years.
JYOTHY FILES PAPERS FOR IPO WITH SEBI
Jyothy Laboratories Ltd has filed draft red herring prospectus with the Securities and Exchange Board of India for its initial public offering.
The company will offer 44.30 lakh equity shares of face value Rs 5 each through 100 per cent book building process. The offer constitutes 30.52 per cent of the post-issue capital.
Jyothy Laboratories is a fast moving consumer goods company offering branded product like Ujala fabric whitener along with other products like mosquito repellents, dishwashing, bath and incense products.
Kotak Mahindra Capital and Enam Financial are book running lead managers to the offer.
The company will offer 44.30 lakh equity shares of face value Rs 5 each through 100 per cent book building process. The offer constitutes 30.52 per cent of the post-issue capital.
Jyothy Laboratories is a fast moving consumer goods company offering branded product like Ujala fabric whitener along with other products like mosquito repellents, dishwashing, bath and incense products.
Kotak Mahindra Capital and Enam Financial are book running lead managers to the offer.
PTC INDIA BOARD NODS TO RAISE Rs 1,200cr
The board of directors of PTC India have approved a proposal raise Rs 1,200 crore for expansion of the company's existing business.
According to a release issued by PTC to the BSE today, the board after agreeing have recommeded the matter to the next AGM for necessary enhancement of equity base.
According to a release issued by PTC to the BSE today, the board after agreeing have recommeded the matter to the next AGM for necessary enhancement of equity base.
GAIL EYES RS 45,000 Cr REVENUES BY 2011
GAIL (India) is aiming revenues of Rs 45,000 crore by 2011 riding on higher growth in the gas transmission business. The company plans to lay pipelines of around 5,000 km, within the 11th plan period, at a cost of Rs 18,000 crore.
"With the laying of the pipelines, the transmission capacity is expected to increase from 140 million cubic meter of natural gas at present, to around 280 million cubic meter," U D Choubey, chairman and managing director, GAIL, said.
GAIL currently owns and operates a network of over 6,100 km of natural gas high pressure trunk pipelines.
The government has given in-principle clearances for five new pipelines, which would increase Gail's network from 6,100km to 11,500km, Choubey said.
The project will be implemented in two phases.
The investments will be funded largely from borrowings, while internal accruals will also be used to part-fund the project.
In the second phase, Gail would lay the 890 km long Jagdishpur-Haldia pipeline. The pipeline will serve the industrial belts of Gorakhpur, Barauni, Durgapur and Haldia.
In 2006-07, the company's turnover stood at Rs 16,047 crore on a net profit of Rs 2,387 crore.
With natural gas emerging as the fuel of choice in the country, GAIL is concentrating on growth in the city gas segment.
Apart from joint ventures for city gas projects for Delhi, Mumbai, Andhra Pradesh, Lucknow, Agra, Kanpur, Tripura, Maharashtra, Madhya Pradesh and Rajasthan, GAIL and Indian Oil Corporation form a joint venture for city gas distribution projects in Bengal.
GAIL and Indian Oil will each hold 22.5% in the venture, while the state government will hold 5% and 50% will be with strategic investors.
Initially, gas from coal bed methane (CBM) may be distributed in the Kolkata-Asansol region, which will later be replaced by natural gas. The gas will be cheaper than LPG, Choubey said.
The company will also enter the petrochemicals, exploration & production (E&P) and CBM extraction sectors.
"With the laying of the pipelines, the transmission capacity is expected to increase from 140 million cubic meter of natural gas at present, to around 280 million cubic meter," U D Choubey, chairman and managing director, GAIL, said.
GAIL currently owns and operates a network of over 6,100 km of natural gas high pressure trunk pipelines.
The government has given in-principle clearances for five new pipelines, which would increase Gail's network from 6,100km to 11,500km, Choubey said.
The project will be implemented in two phases.
The investments will be funded largely from borrowings, while internal accruals will also be used to part-fund the project.
In the second phase, Gail would lay the 890 km long Jagdishpur-Haldia pipeline. The pipeline will serve the industrial belts of Gorakhpur, Barauni, Durgapur and Haldia.
In 2006-07, the company's turnover stood at Rs 16,047 crore on a net profit of Rs 2,387 crore.
With natural gas emerging as the fuel of choice in the country, GAIL is concentrating on growth in the city gas segment.
Apart from joint ventures for city gas projects for Delhi, Mumbai, Andhra Pradesh, Lucknow, Agra, Kanpur, Tripura, Maharashtra, Madhya Pradesh and Rajasthan, GAIL and Indian Oil Corporation form a joint venture for city gas distribution projects in Bengal.
GAIL and Indian Oil will each hold 22.5% in the venture, while the state government will hold 5% and 50% will be with strategic investors.
Initially, gas from coal bed methane (CBM) may be distributed in the Kolkata-Asansol region, which will later be replaced by natural gas. The gas will be cheaper than LPG, Choubey said.
The company will also enter the petrochemicals, exploration & production (E&P) and CBM extraction sectors.
NTPC PLANS FOLLOW-ON PUBLIC OFFER
National Thermal Power Corporation (NTPC) is planning to tap the capital market again after about three years of its Initial Public Offer and has sent a proposal in this regard to the power ministry.
"NTPC may go for a follow-on public offer, I have seen the proposal... it is one of the most trusted companies," Power secretary Anil Razdan said while announcing the second stage of NTPC's Dadri project here.
NTPC CMD T Shankarlingam, however, did not confirm the plans and said "as the CMD of the company, I do not have anything to say."
When asked whether NTPC would come out with a rights issue or yet another equity issue diluting the government's stake, the officials declined to comment.
At the time of its IPO in 2004, NTPC had offered about 10 per cent of its equity along with a dilution of an equivalent stake of the Government in the PSU.
NTPC is planning a huge expansion and is targeting to double its capacity to 50,000 Mega Watt (MW) by 2012 from 27,904 MW currently.
The company also plans to venture into nuclear power manufacturing and power generation in the hydro sector.
The sources said the company may use the proceeds form the FPO for its expansion activities.
"NTPC may go for a follow-on public offer, I have seen the proposal... it is one of the most trusted companies," Power secretary Anil Razdan said while announcing the second stage of NTPC's Dadri project here.
NTPC CMD T Shankarlingam, however, did not confirm the plans and said "as the CMD of the company, I do not have anything to say."
When asked whether NTPC would come out with a rights issue or yet another equity issue diluting the government's stake, the officials declined to comment.
At the time of its IPO in 2004, NTPC had offered about 10 per cent of its equity along with a dilution of an equivalent stake of the Government in the PSU.
NTPC is planning a huge expansion and is targeting to double its capacity to 50,000 Mega Watt (MW) by 2012 from 27,904 MW currently.
The company also plans to venture into nuclear power manufacturing and power generation in the hydro sector.
The sources said the company may use the proceeds form the FPO for its expansion activities.
ITC Q4 NET UP 19% TO Rs 651 Cr
FMCG major ITC on Friday reported a 18.6% growth in net profit for the fourth quarter ended March 2007, to Rs 650.7 crore after adjusting for income tax refunds. Net sales revenue rose 24.5 % to Rs 3,466.3 crore.
Net turnover for the year at Rs 12,369.3 crore grew 26.3%, driven by the non-cigarette FMCG businesses, higher agri-business revenues and the continuing strong performance of the hotels business, the company said in a statement issued after its board meeting. Earnings per share for the year stands at Rs 7.19.
The non-cigarette portfolio grew by 37.6% during the year and accounts for 52.3% of the company’s net turnover. Pre-tax profit increased by 20.1% to Rs 3,926.7 crore, while post-tax profit at Rs 2,699.9 crore registered a growth of 20.8%.
The board also recommended a dividend of Rs 3.10 per ordinary share of Re 1 each entailing a cash outflow of Rs 1,364.5 crore. It has also approved the setting up of a strategic business unit for ‘home & personal care products’ as part of the FMCG portfolio.
ITC’s operating profit margin (OPM) declined during the year primarily due to a sharp increase in raw material costs. OPM fell by 200 basis points to 32% during the year, due to a 35.2% increase in raw material consumption compared to a 26.3% increase in net sales.
Key components of its raw materials include tobacco, paper pulp and agri-inputs. One of the reasons for the dip is also a higher proportion of agri-products in the topline. Relatively lower margins in the agri-business tend to affect overall margins too. Overall agri-business revenues during the year grew 38% driven by soya and rice exports and leaf tobacco.
Cigarettes remain the key contributor to profits. It contributed to over 80% of segment profits, despite contributing to just 60% of segment sales.Cigarette sales volume grew by about 7% during the year, and a 13% increase in rupee terms indicates the effect of price hikes during the year.
The branded packaged foods business is growing handsomely, with the ‘others’ segment up by 68% in revenues. Profitability is still an issue, with a segment loss of Rs 202 crore compared to Rs 172 crore last year. Hotels and paper did well, with profits running far ahead of sales in terms of growth.
Revenue from ITC’s hotels business during the year under review was impressive, with segment revenues growing by 26% to touch Rs 986 crore because of better room rates, improved occupancies and food & beverage sales.
In terms of consumer spend, both Aashirvaad and Sunfeast have become Rs 500-crore brand within a short span. Aashirvaad Atta now commands a 52% market share among national branded players. The year also marked ITC’s foray into the fast-growing organised salty snacks market with the launch of the Bingo range of potato chips and finger snacks.
The hotels business saw ITC-Welcomgroup entering a new phase in its collaboration with Starwood Hotels & Resorts through a new franchisee agreement.Sale of value-added paperboards grew by 15% over last year in line with the company’s strategy to enrich the product-mix. Besides, the new Haridwar facility, which will add manufacturing capacity both in the paperboard cartons and flexibles segments, was commissioned during the year.
The facility will enable the business to service the growing needs of the company’s foods business and also facilitate cost-effective and efficient servicing of external customers.The company’s lifestyle retailing business posted a 52% growth during the year under review in both premium and popular segments.
Net turnover for the year at Rs 12,369.3 crore grew 26.3%, driven by the non-cigarette FMCG businesses, higher agri-business revenues and the continuing strong performance of the hotels business, the company said in a statement issued after its board meeting. Earnings per share for the year stands at Rs 7.19.
The non-cigarette portfolio grew by 37.6% during the year and accounts for 52.3% of the company’s net turnover. Pre-tax profit increased by 20.1% to Rs 3,926.7 crore, while post-tax profit at Rs 2,699.9 crore registered a growth of 20.8%.
The board also recommended a dividend of Rs 3.10 per ordinary share of Re 1 each entailing a cash outflow of Rs 1,364.5 crore. It has also approved the setting up of a strategic business unit for ‘home & personal care products’ as part of the FMCG portfolio.
ITC’s operating profit margin (OPM) declined during the year primarily due to a sharp increase in raw material costs. OPM fell by 200 basis points to 32% during the year, due to a 35.2% increase in raw material consumption compared to a 26.3% increase in net sales.
Key components of its raw materials include tobacco, paper pulp and agri-inputs. One of the reasons for the dip is also a higher proportion of agri-products in the topline. Relatively lower margins in the agri-business tend to affect overall margins too. Overall agri-business revenues during the year grew 38% driven by soya and rice exports and leaf tobacco.
Cigarettes remain the key contributor to profits. It contributed to over 80% of segment profits, despite contributing to just 60% of segment sales.Cigarette sales volume grew by about 7% during the year, and a 13% increase in rupee terms indicates the effect of price hikes during the year.
The branded packaged foods business is growing handsomely, with the ‘others’ segment up by 68% in revenues. Profitability is still an issue, with a segment loss of Rs 202 crore compared to Rs 172 crore last year. Hotels and paper did well, with profits running far ahead of sales in terms of growth.
Revenue from ITC’s hotels business during the year under review was impressive, with segment revenues growing by 26% to touch Rs 986 crore because of better room rates, improved occupancies and food & beverage sales.
In terms of consumer spend, both Aashirvaad and Sunfeast have become Rs 500-crore brand within a short span. Aashirvaad Atta now commands a 52% market share among national branded players. The year also marked ITC’s foray into the fast-growing organised salty snacks market with the launch of the Bingo range of potato chips and finger snacks.
The hotels business saw ITC-Welcomgroup entering a new phase in its collaboration with Starwood Hotels & Resorts through a new franchisee agreement.Sale of value-added paperboards grew by 15% over last year in line with the company’s strategy to enrich the product-mix. Besides, the new Haridwar facility, which will add manufacturing capacity both in the paperboard cartons and flexibles segments, was commissioned during the year.
The facility will enable the business to service the growing needs of the company’s foods business and also facilitate cost-effective and efficient servicing of external customers.The company’s lifestyle retailing business posted a 52% growth during the year under review in both premium and popular segments.
OWM PLANS FOR RS 170 cr IPO BY JUNE
Oswal Woollen Mills Limited (Nahar Group company) plans raise Rs 150-170 crore through its Initial Public Offer by last week of June to fund its expansion plans. "We will go public either in third or last week of June," Punjab-based OWM's Director (Corporate Finance and Tax) Dinesh Gogna told. Within 3-4 days, the company would resubmit its Draft Red Herring Prospectus (DRHP) with market regulator SEBI, he said.
The company is looking to raise Rs 150-170 crore with a public issue of 83.2 lakh shares. Proceeds of this issue would be used to partly finance its major expansion programmes of Rs 253 crore, which includes expansion of new production capacities and opening 123 'Monte Carlo' brand outlets in the country by 2009, with an investment of Rs 55 crore. "With the public issue, the promoter's share in OWM will come down by 25 per cent," he said.
The company was planning to launch the public issue in September last year, but was postponed citing uncertainty in equity market. It would also set up a new cotton spinning unit with an investment of Rs 102 crore. OWM would also spend Rs 32 crore on enhancing the manufacturing capacity of Monte Carlo brand of garments from 7.5 lakh pieces per annum to 8.75 lakh pieces per annum. Another Rs 32 crore would be spent on expanding the production capacity of worsted woollen spinning mill from 26,248 spindles to 31,032 spindles. The company has also proposed to spend Rs 32 crore in setting up a captive power generation plant of 7.5 MW, he added.
DLF BUILDS MILLIONAIRE CLUB PRE-PUBLIC OFFER
The DLF initial public offer (IPO), which is expected to hit the market in a month’s time, has already created millionaires out of a few 1,000 minority shareholders of the company.
These shareholders, it may be recalled, had gone to court last year to claim their share of the expanded equity capital of the company. Back of the envelope calculations suggest that even if one were to take the lowest price (according to Sebi’s guidelines, the issue cannot be priced less than Rs 500 a share), all minority shareholders who had 50 shares originally and have now been allotted 22,000 shares each, will be worth over crores of rupees.
The company has issued 22,000 shares to all minority shareholders who were holding 50 shares while 44,000 shares have been issued to those with 100 shares, top company officials told. Minority shareholders in the company represent close to 0.5% of the total shareholding. The promoter, KP Singh holds the remaining 99.5% stake in the company.
DLF’s minority shareholders had complained to Sebi that they were denied participation in the company’s rights issue in September 2005, when the DLF first filed the draft prospectus for going public last year. The Rs 35 crore rights issue of debentures in September 2005 had raised the promoters’ stake in DLF to 99.5%.
The real estate giant, which recently received approval from market regulator "Sebi" for its IPO, is expecting to raise an estimated Rs 13,600 crore from the market. The approval, came nearly a year after it first filed the draft prospectus.
The company had filed a renewed prospectus in January this year after its first attempt came to naught due to certain regulatory objections over minority shareholders’ complaints against the company. It had filed its first prospectus in May 2006, which it had to withdraw in August of the same year.
DLF proposes to enter the capital market with a public issue of 17.5 crore equity shares of Rs 2 each through 100% book-building process. The post-issue dilution of the proposed issue would be over 10%, bringing down the promoter’s holding by this amount.
Given that the company plans to raise the same amount of about Rs 13,600 crore in its second attempt too, but with lesser shares being offered through the IPO, reflects that the company’s valuation has increased over the past year. The company had last year proposed to offer 20.2 crore equity shares.
These shareholders, it may be recalled, had gone to court last year to claim their share of the expanded equity capital of the company. Back of the envelope calculations suggest that even if one were to take the lowest price (according to Sebi’s guidelines, the issue cannot be priced less than Rs 500 a share), all minority shareholders who had 50 shares originally and have now been allotted 22,000 shares each, will be worth over crores of rupees.
The company has issued 22,000 shares to all minority shareholders who were holding 50 shares while 44,000 shares have been issued to those with 100 shares, top company officials told. Minority shareholders in the company represent close to 0.5% of the total shareholding. The promoter, KP Singh holds the remaining 99.5% stake in the company.
DLF’s minority shareholders had complained to Sebi that they were denied participation in the company’s rights issue in September 2005, when the DLF first filed the draft prospectus for going public last year. The Rs 35 crore rights issue of debentures in September 2005 had raised the promoters’ stake in DLF to 99.5%.
The real estate giant, which recently received approval from market regulator "Sebi" for its IPO, is expecting to raise an estimated Rs 13,600 crore from the market. The approval, came nearly a year after it first filed the draft prospectus.
The company had filed a renewed prospectus in January this year after its first attempt came to naught due to certain regulatory objections over minority shareholders’ complaints against the company. It had filed its first prospectus in May 2006, which it had to withdraw in August of the same year.
DLF proposes to enter the capital market with a public issue of 17.5 crore equity shares of Rs 2 each through 100% book-building process. The post-issue dilution of the proposed issue would be over 10%, bringing down the promoter’s holding by this amount.
Given that the company plans to raise the same amount of about Rs 13,600 crore in its second attempt too, but with lesser shares being offered through the IPO, reflects that the company’s valuation has increased over the past year. The company had last year proposed to offer 20.2 crore equity shares.
INDIABULLS GDR OFFERING RAISES Rs 1,220 Crore
Indiabulls Financial Services on Thursday said it has raised over Rs 1,220 crore through a global depository receipt offering priced at $13.06 per share. The money has been raised to finance the consumer loan business, which is now the focus area for the group, contributing over 57% of the earnings.
Investment banking sources informed that the issue attracted bids for $671 million, over 2.4 times the issue size. High-profile investors, who participated in the offering, included LN Mittal, Fidelity and Orient Global, the sources added.
Goldman Sachs and Merrill Lynch International were the joint lead managers of GDR issue. The GDRs will be listed on the IOB Board of the London Stock Exchange and Luxembourg Stock Exchange, an Indiabulls release said.
The consolidated net worth of Indiabulls Financial Services post this transaction will rise to over Rs 3,600 crore, making it one of the top 5 capitalised players in the banking and financial services industry in India.
Foreign institutional investors (FIIs) have been steadily increasing their stake in Indiabulls and now own over 60% stake in the company.
Last month, Citigroup raised its stake to 6.58% , Oberon to 10.47%, Merrill Lynch and Goldman Sachs to 5% .
For the financial year ended March 31, 2007, the company reported a net profit of Rs 443.4 crore on revenues of Rs 1,244.4 crore.
Investment banking sources informed that the issue attracted bids for $671 million, over 2.4 times the issue size. High-profile investors, who participated in the offering, included LN Mittal, Fidelity and Orient Global, the sources added.
Goldman Sachs and Merrill Lynch International were the joint lead managers of GDR issue. The GDRs will be listed on the IOB Board of the London Stock Exchange and Luxembourg Stock Exchange, an Indiabulls release said.
The consolidated net worth of Indiabulls Financial Services post this transaction will rise to over Rs 3,600 crore, making it one of the top 5 capitalised players in the banking and financial services industry in India.
Foreign institutional investors (FIIs) have been steadily increasing their stake in Indiabulls and now own over 60% stake in the company.
Last month, Citigroup raised its stake to 6.58% , Oberon to 10.47%, Merrill Lynch and Goldman Sachs to 5% .
For the financial year ended March 31, 2007, the company reported a net profit of Rs 443.4 crore on revenues of Rs 1,244.4 crore.
ASCL TO RAISE Rs 33.5 cr THROUGH IPO
Gujarat-based pigments maker Asahi Songwon Colors (ASCL) on Thursday said it would raise Rs 33.5 crore through an initial public offering (IPO) to part finance its capacity expansion programme.
The company plans to increase CPC Blue Crude capacity to 10,800 million tonnes per annum (MTPA) at its Vadodara plant from the present 3,600 MTPA and set up a 1,200 MTPA Pigment Beta Blue manufacturing facility with a two MW captive power plant at a total investment of Rs 52 crore. Japan's Dainippon Ink & Chemicals (DIC), the largest ink maker in the world, has recently invested Rs 10.5 crore to acquire a pre-IPO stake of 10.12 per cent in the company at a price of Rs 122 per share. Company has fixed the price band for the issue at Rs 90 to Rs 108 per share of Rs 10 each.
The issue would remain open from May 9 till May 15. Fortune Financial Services (India) is the Book Running Lead Manager (BRLM) for the issue, while Intime Spectrum Registry is Registrar to the issue.
During the nine-month period ended December 2006, ASCL recorded a turnover of Rs 53.2 crore, close to 78 per cent of which came from exports.
The company plans to increase CPC Blue Crude capacity to 10,800 million tonnes per annum (MTPA) at its Vadodara plant from the present 3,600 MTPA and set up a 1,200 MTPA Pigment Beta Blue manufacturing facility with a two MW captive power plant at a total investment of Rs 52 crore. Japan's Dainippon Ink & Chemicals (DIC), the largest ink maker in the world, has recently invested Rs 10.5 crore to acquire a pre-IPO stake of 10.12 per cent in the company at a price of Rs 122 per share. Company has fixed the price band for the issue at Rs 90 to Rs 108 per share of Rs 10 each.
The issue would remain open from May 9 till May 15. Fortune Financial Services (India) is the Book Running Lead Manager (BRLM) for the issue, while Intime Spectrum Registry is Registrar to the issue.
During the nine-month period ended December 2006, ASCL recorded a turnover of Rs 53.2 crore, close to 78 per cent of which came from exports.
RELIANCE COMMUNICATIONS Q4 NET SURGES 154% TO Rs 1023.3Cr
Reliance Communications has declared its Q4FY07 results. The company's net profit was up 154% to Rs 1,023.3 crore (Rs 10.23 billion) from Rs 403 crore (Rs 4.03 billion) in same period of last financial year and revenues up by 32.5% to Rs 3,936.7 crore (Rs 39.36 billion) versus Rs 2,970.4 crore (Rs 29.7 billion) .
For quarter-on-quarter, it has posted net profit of Rs 1,023.3 crore versus Rs 924 crore (Rs 9.24 billion), a growth of 10.7% and revenues of Rs 3,936.7 crore compared to Rs 3,755.3 crore in previous quarter, up by 4.8%.
Rel Comm's Q4 EBITDA stood at Rs 1,635 crore (Rs 16.35 billion) and margin at 41.5%.
Wireless margins in the fourth quarter was at 39%, global business margins at 24% and enterprise business margins at 49%.
For FY07, the company has reported net profit of Rs 3,163 crore (Rs 31.63 billion) and revenues of Rs 14,468 crore (Rs 144.68 billion).
For quarter-on-quarter, it has posted net profit of Rs 1,023.3 crore versus Rs 924 crore (Rs 9.24 billion), a growth of 10.7% and revenues of Rs 3,936.7 crore compared to Rs 3,755.3 crore in previous quarter, up by 4.8%.
Rel Comm's Q4 EBITDA stood at Rs 1,635 crore (Rs 16.35 billion) and margin at 41.5%.
Wireless margins in the fourth quarter was at 39%, global business margins at 24% and enterprise business margins at 49%.
For FY07, the company has reported net profit of Rs 3,163 crore (Rs 31.63 billion) and revenues of Rs 14,468 crore (Rs 144.68 billion).
FORTIS HEALTHCARE ISSUE PRICE Rs 108 PER SHARE
Leading private healthcare firm Fortis Healthcare Ltd today fixed the issue price at Rs 108 per share for its Rs 503 crore initial public offer.
"We are very happy with the response to the IPO. We have received over 1.2 lakh applications and I thank all investors for their confidence in our company's future," Fortis Healthcare Managing Director Shivinder Mohan Singh said in a statement.
The Ranbaxy promoter group company has fixed the issue price towards the upper end of the IPO price band of Rs 92-110 per equity share.
The IPO of Fortis Healthcare was oversubscribed 2.78 times with bids for over 12.74 crore shares against about 4.57 crore shares offered in the public issue.
The qualified institutional buyers (QIB) portion of the IPO, reserved for FIIs, mutual funds and domestic financial institutions, got subscribed 2.72 times, while the retail portion received bids of over 3.26 times.
Fortis Healthcare, which runs 11 hospitals in Northern India, has received around Rs 153.69 crore through a couple of pre-IPO placements.
"We are very happy with the response to the IPO. We have received over 1.2 lakh applications and I thank all investors for their confidence in our company's future," Fortis Healthcare Managing Director Shivinder Mohan Singh said in a statement.
The Ranbaxy promoter group company has fixed the issue price towards the upper end of the IPO price band of Rs 92-110 per equity share.
The IPO of Fortis Healthcare was oversubscribed 2.78 times with bids for over 12.74 crore shares against about 4.57 crore shares offered in the public issue.
The qualified institutional buyers (QIB) portion of the IPO, reserved for FIIs, mutual funds and domestic financial institutions, got subscribed 2.72 times, while the retail portion received bids of over 3.26 times.
Fortis Healthcare, which runs 11 hospitals in Northern India, has received around Rs 153.69 crore through a couple of pre-IPO placements.
TATA POWER BUYS COASTAL GUJARAT POWER
Tata Power Company on Apr. 23, 2007, acquired the Coastal Gujarat Power, a special purpose vehicle (SPV) formed for Mundra Ultra Mega Power Project (UMPP).A formal execution of the documents took place between Power Finance Corporation (PFC) and Tata Power.
The signing of the share purchase agreement, Escrow agreement, Hypothecation agreement, and port service agreements, by PFC, bankers, procurers and Tata Power, now allows the company to go ahead with the various project development activities.A performance bank guarantee of Rs 3 billion was provided by the company, in favour of PFC.
Coastal Gujarat Power, signed power purchase agreements (PPAs) with seven procurers (distribution licensees), for the sale of contracted capacity and supply of 4000 MW electricity to these licensees, but it delineates responsibility of procurers and company for the next important milestone. It nominates Gujarat Distribution company as the lead procurer on behalf of all procurers.
The development follows the recent announcement made by the company for acquisition of 30% equity stakes in two major Indonesian thermal coal producers, PT Kaltim Prima Coal (KPC) and PT Arutmin Indonesia (Arutmin) (together the Coal Companies), as well as related trading companies owned by PT Bumi Resources Tbk (Bumi).The acquisition specifically addresses fuel requirements for Mundra UMPP, Trombay and coastal power project in Maharashtra and is complimentary and supports the assumptions made in the bid for Mundra UMPP.
The Government of India, announced the implementation of several Ultra Mega Power Projects through an International Competitive Bidding process and is the largest ever bid based project initiative to be executed in India as well as abroad. The company submitted its Expression of Interest for four UMPPS (out of four, bidding process for the two UMPPs is still pending).
As a result, the company won the bid for Mundra Ultra Mega Power Project in Gujarat at a levelized tariff of Rs 2.26/unit. The project is expected to commission its first unit in 11th plan.
The signing of the share purchase agreement, Escrow agreement, Hypothecation agreement, and port service agreements, by PFC, bankers, procurers and Tata Power, now allows the company to go ahead with the various project development activities.A performance bank guarantee of Rs 3 billion was provided by the company, in favour of PFC.
Coastal Gujarat Power, signed power purchase agreements (PPAs) with seven procurers (distribution licensees), for the sale of contracted capacity and supply of 4000 MW electricity to these licensees, but it delineates responsibility of procurers and company for the next important milestone. It nominates Gujarat Distribution company as the lead procurer on behalf of all procurers.
The development follows the recent announcement made by the company for acquisition of 30% equity stakes in two major Indonesian thermal coal producers, PT Kaltim Prima Coal (KPC) and PT Arutmin Indonesia (Arutmin) (together the Coal Companies), as well as related trading companies owned by PT Bumi Resources Tbk (Bumi).The acquisition specifically addresses fuel requirements for Mundra UMPP, Trombay and coastal power project in Maharashtra and is complimentary and supports the assumptions made in the bid for Mundra UMPP.
The Government of India, announced the implementation of several Ultra Mega Power Projects through an International Competitive Bidding process and is the largest ever bid based project initiative to be executed in India as well as abroad. The company submitted its Expression of Interest for four UMPPS (out of four, bidding process for the two UMPPs is still pending).
As a result, the company won the bid for Mundra Ultra Mega Power Project in Gujarat at a levelized tariff of Rs 2.26/unit. The project is expected to commission its first unit in 11th plan.
RELIANCE COMMUNICATION TO INVEST Rs 150 bn
Reliance Communications will invest Rs 150 billion, to set up and install an additional 15,000 base transceiver stations (BTS), in the country, reports Business Standard.
After the installation, the company will have a total of 30,000 BTSs across the country. The company intends to complete the rollout of the BTS in a record time of three months.
The installation of towers, will help the company in expanding both its CDMA (Code division multiple access) and GSM(Global systems for Mobile communications) services.
After the installation, the company will have a total of 30,000 BTSs across the country. The company intends to complete the rollout of the BTS in a record time of three months.
The installation of towers, will help the company in expanding both its CDMA (Code division multiple access) and GSM(Global systems for Mobile communications) services.
ICRA STOCK SURGES IN DEBUT TRADE
Credit rating agency ICRA today surged a whopping 166.66 per cent on its debut trade on the Bombay Stock Exchange and settled at Rs 797.60 at the end of today's trading session. On the National Stock Exchange, the scrip witnessed a similar trend as it closed the day at Rs 829, with a premium of 163.63 per cent over its issue price of Rs 330.
The tremendous response that ICRA received comes in the wake of market regulator Sebi making IPO grading mandatory. ICRA is one of the four rating agencies currently allowed to conduct IPO grading, the other three are -- CRISIL, CARE and Fitch India. All these players are eyeing a market share of 25-35 per cent each with an estimated size of at least Rs 50 crore. The shares of the company touched a high of Rs 880.10 and a low of Rs 525 on the Bombay Stock Exchange. The scrip was last trading at Rs 797.60 and over 1.24 crore shares changed hands on the BSE.
On the National Stock Exchange, ICRA touched a high of Rs 870 and a low of Rs 540. The scrip was last trading at Rs 829. The company witnessed massive investor interest as over 1.90 crore shares got traded on NSE. The company got listed with a premium of 59.09 per cent on BSE and with 63.63 per cent premium on NSE over its issue price of Rs 330. The company offered 25.81 lakh equity shares of Rs 10 each at a price band of Rs 275 and Rs 330 a share and the Initial Public Offer of the company received magnificent response from investors as the issue was oversubscribed by over 75 times.
HDFC Q3 PAT UP 25 PC AT Rs 355 cr
Housing Development Finance Corporation Limited (HDFC) has registered a 25 per cent increase in profit after tax (PAT) in the third quarter ended December 31 at Rs 355.49 crore, as against Rs 284.52 crore in the same period a year ago. Its profit before tax amounted to Rs 444.82 crore as against Rs 352.30 crore in the corresponding quarter of the previous fiscal, an increase of 26 per cent, HDFC said in a release here on Wednesday. For the nine-month period ended December 31, 2006, HDFC's PAT increased by 23 per cent to Rs 1,020.33 crore as compared with Rs 830.78 crore in the corresponding quarter last fiscal. Its total assets for the nine-month period stood at Rs 58,888 crore as against Rs 47,773 crore in the same year-ago period, up 23 per cent.
Loan approvals amounted to Rs 22,666 crore as against Rs 17,777 crore in the corresponding period last year, a growth of 28 per cent. Loan disbursements during the same period amounted to Rs 17,465 crore as against Rs 13,805 crore during the same period in the previous year, a rise of 27 per cent. The loan portfolio including loans outstanding, deposits and investments in preference shares and debentures for financing real estate projects in the nine-month period ended December 31, 2006, amounted to Rs 54,633 crore as against Rs 43,927 crore in the year-ago period.
During the current fiscal, HDFC also raised Rs 4,550 crore through private placements of non-convertible debentures, inclusive of Rs 400 crore of subordinated debt. HDFC's deposits stood at Rs 11,386 crore as on December 31, 2006 while its capital adequacy ratio was at 13.7 per cent of the risk weighted assets, as against the minimum requirement of 12 per cent.
Tier-I capital adequacy was 8.1 per cent as against a minimum requirement of six per cent.
INDIAN BANK IPO TO HIT THE MARKET IN FEB-07
Indian Bank has fixed a price band of Rs 77 to Rs 91 per share for its initial public offering slated to hit the market next month. The state-owned bank’s first issue aimed at raising Rs 662 crore to Rs 781 crore of funds, is to open on 5 February and close on 9 February, a senior bank executive said. Mr MS Sundara Rajan, Executive Director, Indian Bank told reporters in Chennai on Saturday that bank is offering 8.59 crore shares of Rs 10 each at a premium that would be decided through 100% book building process.
The bank will use the funds to augment its capital base to meet future requirements arising out of Basel II implementation, and also to grow its assets, he said. Following the issue, government holding would come down to 80%. The issue also includes a reservation of 85.95 lakh shares or 10% of the total issue, for Indian Bank employees, he said. The net offer to the public would be 77,355,000 shares. Of this, 60% would go to qualified institutional buyers (including 5% for mutual funds). Further, 10% will be for non-institutional bidders and the remaining 30% for retail investors on a proportionate basis, Mr Rajan said.
The long expected public issue, delayed because of its accumulated losses of Rs 3830.14 crore, comes after the central government allowed it to restructure its capital base. The bank has now netted off its accumulated losses against its paid up capital of Rs 4573.96 crore.
Indian Bank reported a net profit of Rs. 334 crore for the half-year ended September 30, 2006, as compared to Rs. 242.14 crore in the year-ago period, registering a rise of 38%. The operating profit grew by 44.5% to Rs. 526.80 crore from Rs. 364.58 crore.
BIOCON THIRD QUARTER RESULTS ABOVE EXPECTIONS
Biocon has declared its third quarter earnings. The company reported net profit of Rs 55.7 crore (Rs 557 million) versus Rs 43 crore (Rs 430 million) in the corresponding quarter of the previous year, up by 29%.
Its net sales were up 24% at Rs 246.5 crore (Rs 2.46 billion) from Rs 199 crore (Rs 1.99 billion) YoY.
The operating profit surged by 32% at Rs 78 crore (Rs 780 million) in the third quarter versus Rs 59 crore (Rs 590 million) in the same period of the previous year. The OPM stood at 31.7% versus 29.6%.
SEGMENTS WISE
Bio pharmaceuticals up 16% Rs 180 crore versus Rs 155 crore
Enzymes up 11% Rs 20 crore versus Rs 18 crore
Contract research up 68% Rs 47 crore versus Rs28 crore
Q3FY07
Research Services and Biopharmaceuticals delivered strong growth
Support from Statin exports to the US market and technology and licensing revenues.
Significant improvement in the overall business.
BUSINESS
Strong R&D capabilities in fermentation technology, biotechnology and drug discovery
Leader in production of biopharmaceuticals through fermentation route
Focus on generics, bio-generics and drug discovery.
Biocon has declared its third quarter earnings. The company reported net profit of Rs 55.7 crore (Rs 557 million) versus Rs 43 crore (Rs 430 million) in the corresponding quarter of the previous year, up by 29%.
Its net sales were up 24% at Rs 246.5 crore (Rs 2.46 billion) from Rs 199 crore (Rs 1.99 billion) YoY.
The operating profit surged by 32% at Rs 78 crore (Rs 780 million) in the third quarter versus Rs 59 crore (Rs 590 million) in the same period of the previous year. The OPM stood at 31.7% versus 29.6%.
SEGMENTS WISE
Bio pharmaceuticals up 16% Rs 180 crore versus Rs 155 crore
Enzymes up 11% Rs 20 crore versus Rs 18 crore
Contract research up 68% Rs 47 crore versus Rs28 crore
Q3FY07
Research Services and Biopharmaceuticals delivered strong growth
Support from Statin exports to the US market and technology and licensing revenues.
Significant improvement in the overall business.
BUSINESS
Strong R&D capabilities in fermentation technology, biotechnology and drug discovery
Leader in production of biopharmaceuticals through fermentation route
Focus on generics, bio-generics and drug discovery.
GPL TO FLOAT IPO TO RAISE Rs 1200 Cr
Gopalpur Port Limited (GPL) on Sunday said it would float an IPO to garner around Rs 1200 crore from the markets for developing the port on Built Operate Owned Share and Transfer (BOOST) basis in Orissa's Ganjam district. "Out of a total outlay of Rs 1800 crore for the project, we would go for IPO to raise Rs 1,200 crore from the market this year and the remaining money would be our equity," Chairman of GPL D P Singh told media.
GPL is a Special Purpose Vehicle (SPV) formed by a consortium of three companies- Sara International Limited, Orissa Stevedores Limited and Hong Kong-based Noble, to develop the Gopalpur Port. Singh said the consortium had signed an agreement with the Navin Pattnaik government on September 16, 2006, on developing the port, which mandated them to develop it within 12 months. "However, we have more than matched the deadline and are slated to begin the first phase of the port operations on January 15, for which we have already spent Rs 150 crores," he said. He said the SPV is in talks with IFCL and banks to raise money through hedge funds. The consortia were also in talks with the Corporation Bank and the Punjab National Bank for the purpose, Singh pointed out.
The consortia were also exploring the possibility of ensuring a Special Economic Zone status for the project, for which they have acquired 629 acres of land. "We are seriously thinking of ensuring a SEZ status for the project so that it could be developed in a big way and would shortly approach the Orissa government for this purpose," the SPV Chairman said. Singh said the consortia have received project proposals for setting up coal-fired power plants with an envisaged capacity of around 3,000 Megawatts. Without naming the utilities he said, GPL has assured them of constructing a dedicated jetty for them to enable unhindered import of thermal-grade coal for their plants. "We are due to construct six jetties in the port and would construct one for the power utilities, as they wish us to do so," he said.
GBN TO RAISE Rs 105 Cr; IPO OPENS ON JAN 15
Global Broadcast News, the owners of news channel CNN-IBN will enter the capital market with its Initial Public Offer to raise Rs 105 crore in a price band of Rs 230 and Rs 250 per share.
The issue opens on January 15 and will close on January 18, the company said today. Proceeds of the issue would be used for expansion into the Hindi news genre by investment into BK Fincap Pvt Ltd, the holding company of Jagran TV Pvt Ltd, which owns the Hindi news channel IBN7.
Parts of the proceeds would also be utilised for loan repayment and general corporate purposes. Out of the total issue, equity shares aggregating up to Rs 5 Crore are being reserved for allotment to eligible employees of the company, while, net offer to public would aggregate up to Rs 100 Crore.
At least 60 per cent is to be allocated on a proportionate basis to Qualified Institutional Buyers (QIBs) and 30 per cent for retail subscribers.
ICICI Securities and Kotak Mahindra Capital are the book running managers to the issue and JM Morgan Stanley and IL&FS the co-book lead managers. GBN is a part of the TV 18 Group, which owns and operates India's leading business and Internet portals.
The TV 18 group owns and operates channels such as CNTV18 and CNBC Awaaz and also operates portals such as moneycontrol.com and commoditiescontrol.com.
BANKING STOCKS JUMPED SHARPLY – UP THE SENSEX
Bank shares jumped on Friday following the government's move on Thursday to bring an ordinance to empower the Reserve Bank of India to fix the level for banks' Statutory Liquidity Ratio (SLR)-- the amount banks maintain with the RBI as percentage of their incremental deposits in government bonds. Though the law allows the RBI to lower the banks’ SLR requirements below the existing 25%, analysts believe the central bank is unlikely to take such as step, as concerns over excess liquidity in the system and climbing inflation persist.
Among top gainers, ICICI Bank, HDFC Bank, State Bank of India, Bank of India, Bank of Baroda and Federal Bank gained 6-9%. Upside in these shares propelled the BSE’s banking index--BANKEX by 6.4% or 445.15 points to 7,359 and equity benchmarks to record closing level on Friday. Banking shares have rallied sharply in recent times, as investors see the sector as a proxy investment to the amount of activity in the Indian economy. The BANKEX has risen roughly 82% in the last six months.
The robust activity in the economy over the last few years has increased the demand for bank credit, much to discomfort of the central bank. While bank credit has grown at annual rate of 30%, deposit growth rate has just been 20%. In a surprise move last month, the RBI increased the cash reserve ratio (CRR) by 50 basis points (0.5%) to 5.5% in its attempts to control inflationary expectations. CRR refers to the minimum amount that commercial banks must keep with the RBI as cash reserves. This step has drained out Rs13,500 crore from the banking system, resulting in further hikes in bank lending rates and is aimed at controlling lending. In this scenario, where the central bank is aiming to slowdown credit growth, analysts are unsure about the prospects of excess money sloshing around in the system. A cut in SLR rate would infuse further liquidity into the system.
“If at all the RBI decides to cut SLR rates before FY08, it will have to match it with hikes in CRR, given the strong demand for credit and higher inflationary expectations,” Mr Dange said. He suggests that the government can look at giving SLR status to bonds issued by infrastructure companies, which will encourage banks to invest in such bonds and will also enable them maintain the SLR levels.
INFOSYS UPS REVENUE GUIDANCE FOR FY 2007
Infosys has once again revised its revenue guidance upwards and projected consolidated income of Rs 139.19 billion ($3.09 billion) for the current fiscal (2006-07).
According to the company's notification to the stock exchanges here Thursday, the projected revenue under the Indian GAAP (generally accepted accounting principles) is expected to be 46.2 per cent higher year-on-year (YoY) over the same period of the last fiscal.
The revised guidance is marginally higher than what the company had projected at the beginning of the third quarter in October at Rs 139 billion, with YoY growth of 46 per cent.
Under the US GAAP, consolidated revenue for the entire fiscal 2007 is expected to be $3.09 billion, with YoY growth of 43.6 per cent as against the earlier projection of $3.04 billion.
Similarly, income for the fourth quarter (January-March) of the current fiscal is expected to be about Rs 37.98 billion, projecting 44.7 YoY growth under the Indian GAAP and $861 million under the US GAAP, with YoY growth of 45.2 percent.
The earnings per share (EPS) for FY 2007 is expected to be Rs.66.63, with YoY growth of 48 per cent. The EPS for the fourth quarter (Q4) is likely to be Rs 17.88, YoY growth of 46.3 per cent.
According to the company's notification to the stock exchanges here Thursday, the projected revenue under the Indian GAAP (generally accepted accounting principles) is expected to be 46.2 per cent higher year-on-year (YoY) over the same period of the last fiscal.
The revised guidance is marginally higher than what the company had projected at the beginning of the third quarter in October at Rs 139 billion, with YoY growth of 46 per cent.
Under the US GAAP, consolidated revenue for the entire fiscal 2007 is expected to be $3.09 billion, with YoY growth of 43.6 per cent as against the earlier projection of $3.04 billion.
Similarly, income for the fourth quarter (January-March) of the current fiscal is expected to be about Rs 37.98 billion, projecting 44.7 YoY growth under the Indian GAAP and $861 million under the US GAAP, with YoY growth of 45.2 percent.
The earnings per share (EPS) for FY 2007 is expected to be Rs.66.63, with YoY growth of 48 per cent. The EPS for the fourth quarter (Q4) is likely to be Rs 17.88, YoY growth of 46.3 per cent.
CORPORATES LIKELY TO RAISE AROUND Rs. 35,000 cr. FROM IPO IN 06-07
Corporates are likely to raise around Rs 35,000 crore from the initial public offerings (IPOs) in the primary market during the current fiscal. Money raised through the IPOs during the period April-November 2006 was Rs 15,189 crore through 37 IPOs as compared to Rs 10,936 crore netted via 79 IPOs in the financial year 2005-06, a SEBI bulletin said here.
With realty giant DLF finally filing offer document for a mega Rs 13,500-crore IPO and Rs 5,260-crore Cairn India issue getting fully subscribed, the money raised through the IPOs by the corporates this fiscal is likely to be around Rs 35,000 crore with some more issue in the pipeline.
"There were 37 IPOs during the period April-November 2006 which raised Rs 15,189 crore as compared to Rs 5,890 crore raised through 41 IPOs during the same period in the previous fiscal," the SEBI bulletin issued in December said. In fiscal 2006, some mega IPOs like Reliance Petroleum and Cairn India hit the market to raise more than a billion dollar each.
While Reliance Petroleum, Tech Mahindra and Sobha Developers raised investor interest to new highs by getting oversubscribed by huge numbers, Deccan Aviation and Cairn India just managed to scrape through. (MORE) PTI RRP SUD RSY RSH 01071126 DEL Drama unfolded on the last trading day of 2006 when Nissan Copper IPO was listed on the BSE and NSE and rose by nearly 248 per cent due to alleged manipulations by the promoters as the circuit filter don't operate on the day of listing.
Among the other IPOs that raised money from primary market in the fiscal 2007 so far were Parsvnath Developers, Gwalior Chemicals, Gayatri Projects, Usher Agro, Patel Engineering, Rathi Udyog, Development Credit Bank, Blue Bird, LT Overseas, Opto Circuit and Plethico Pharma. The revival of the primary market started in 2003-04, gathered momentum in 2004-05, received overwhelming response in 2005-06 and during the first eight months of 2006-07.
RISING RUPEE MAY IMPECT IT COS. BOTTOM LINES
Big IT companies gearing up to unveil its third quarter results from next week onwards, both the analysts and markets are waiting to hear from the majors given the growing appreciation of rupee against the dollar. The rupee has been gaining ground against the greenback. For instance, between June 30, 2006 and January 4, 2007 the rupee has appreciated by 4.43% against the dollar. The exchange rate was Rs 46.41 to a dollar on June 30, 2006 and Rs 44.35to a dollar on January 4, 2007. Interestingly, Infosys was hit by an appreciating rupee by about 1.3% on a sequential basis during the second quarter ending September 30, 2006.
“There should be no problem as regards forex during Q3 but going forward a rising rupee is an issue for Indian exporters,” said Manoj Shenoy, regional director, Anand Rathi Securities. Mr Shenoy believes that the rupee would appreciate and is looking at a rate of Rs 42 to a dollar by December 2007 and Rs 40 by December 2008.
Typically, the Indian IT industry receives more than 90% of its revenues either in dollars or euros but all its cost are in rupee terms. However, the appreciation of the rupee against the dollar is unlikely to have any major impact. Mr Amitabh Chakraborty, head of research, BRICS Securities said the top four IT services exporters from India would witness a 5% to 6% quarter on quarter rise in their top line, while players like Satyam and Wipro could see an expansion in their margins. “The operating margins for Satyam can expand by as much as 80 bps (0.8%) on a sequential basis while in case of Wipro it would be about 0.4%. A rising rupee could impact the bottom line of the other two — Infosys and TCS — by between 60 bps to 90 bps (0.6% to 0.9%),” he said. But there is a sense of optimism as regards the IT/ITeS space. “Tier-II players will do well,” Mr Chakraborty said.
Infosys CFO V Balakrishnan during the second quarter analyst call had said: “We are assuming Rs 45.60 to the dollar for the next quarter (third quarter) and this remainder period of the year and this will impact margins to some extent.” However, the Indian IT companies will increasingly come under pressure from supply side issues which is mainly the availability of required talent pool.
Given the 30% plus growth of the industry, the supply of engineering talent has not been matching up to this demand.
TATA CSN MAY REVISE COROUS BID IN MID - JAN
The takeover battle between Tata Steel and CSN for Anglo-Dutch steelmaker Corus may end soon. The suitors are expected to submit revised bids by the middle of this month. Legal experts and investment bankers expect the two bidders to sweeten offers by that time so that the prevailing situation could be factored into the terms of the auction process mooted by UK Takeover Panel. The panel has set January 30 as deadline for submitting revised bids, albeit with a rider that if the competitive situation continues ''shortly before this date'' auction process would be initiated to decide winner. If the revised bids are in by mid-January, it would give the panel time to factor in the development into the auction process that would be announced by month-end, Roy Montague-Jones, partner and joint India head of UK-based law firm Richards Butler said. Jones said the panel could announce an auction a few days before January 30. On the panel's reference to a competitive situation existing ''shortly before January 30,'' he said it probably means that this is the date by which matters should be resolved. If Tata Steel and CSN have bids on table, the panel will announce an auction procedure, which has lasted two-three days in the past, he said. Exact terms and conditions of an auction are set by the panel in consultation with all parties involved, Jones said. However, it is quite rare that the competitive situation continues until the late stages of a bid, particularly when both bidders are offering cash for the deal, feel experts. They also anticipate one of the bidders to withdraw from the battle ahead of the auction exercise. The chances of the process not reaching the level of auction are also high due to a possible clause in the auction terms that could force the bidders to add a significant premium over the previous offer. If the panel rules for a hike of 20-25 pence a share in each revised bid during auction, bidders might decide against going for the auction, as experts believe CSN's 515 pence a share is on higher side.
Q3 NUMBERS TO KEEP PARTY ON..
The mood on Dalal Street remains positive as the market heads into the new calendar year. Expectations of strong corporate earnings for the October-December quarter, and hopes that overseas investors could allocate a greater part of their portfolio to India is likely to help sustain the positive momentum seen over the last week. Technology stocks, especially the frontliners, are expected to do well as the sector is seen outperforming in terms of quarterly earnings growth.“The markets should be upbeat (bullish) this week. We expect renewed interest from foreign funds,” said Gaurang Shah of Geojit Financial Services. The market generally performs well in January, Mr Shah said. He said benchmark indices would continue to trend higher, but with intermittent corrections. “We expect NSE Nifty to be in the range of 4040-4050 at the close of coming week. The BSE Sensex should at least gain 700 points this week,” Mr Shah said. The optimism over strong quarterly earnings is based on the robust advance tax payments for December. Companies like Reliance Industries, Tata group companies and L&T have paid substantially higher advance tax in the third instalment, as have cement and oil companies. “ The most comforting aspect, however, is the increasing confidence of retail investors in Indian equities. We haven’t had any significant retail participation after the market crash in May. But over the past couple of weeks, there are indications of increased retail interest,’’ said a BSE broker. Among the sectors that are likely to perform well this week are frontline IT, pharma, secondline banking companies, cement and capital goods. At the broader level, analysts feel inflation continues to be a key cause of concern. Inflationary pressures heightened at the close of the year, touching 5.43% for the week ended December 16, on a basis point short of the fiscal’s highest inflation rate. “We believe India and China are overstretching their respective growth cycles with clear signs of excesses. The greatest challenge we see is the need to balance the economic contribution of investment and consumption,” a recent report by brokerage house JM Morgan Stanley said.
UNION BANK's BRANCH EXPANSION PROGRAMME
Union Bank of India has obtained licences from Reserve Bank of India to open new branches in India . This will enable the Bank to increase its network by 100 by the end of the financial year. The Bank already has a pan India presence and the new branches will be opened at those centers where the Bank does not presently have a physical presence.
This Bank has been concentrating on organic growth and its network of branches will be supported by ATMs which will be increased to 1000 by the end of the current year. Of the Bank’s 2110 branches, 900 branches are under the CBS network offering anytime anywhere banking. Internet banking and telebanking are offered at all these branches.
This Bank has been concentrating on organic growth and its network of branches will be supported by ATMs which will be increased to 1000 by the end of the current year. Of the Bank’s 2110 branches, 900 branches are under the CBS network offering anytime anywhere banking. Internet banking and telebanking are offered at all these branches.
PNB HIKES LENDING RATE
Punjab National Bank on Thursday announced a 25 basis point hike in its benchmark prime lending rate (PLR) to protect its net interest margin. The PLR would now go up from 11.5 per cent to 11.75% with effect from January 1 next year.
The move to hike PLR comes in the wake of the recent increase in deposit rates and also due to tighter liquidity conditions.
PNB had, on December 22 this year, increased deposit rates by 25-75 basis points for different maturities. Mr S.C. Gupta, Chairman and Managing Director of the bank, had on Saturday last maintained that there was no plan to hike PLR and that only sub-PLR rates would be realigned.
But the CRR hike and advance tax payments by corporates for December 15 instalment has led to a spurt in the call rates in the recent days and tightened liquidity conditions. Call rates have almost doubled since the RBI's announcement of a two-stage CRR hike. The first leg of the CRR hike has already come into effect from Saturday and the next stage would come into effect from January 6 next year.
However, unlike certain banks, PNB had not tapped the call money market for conforming to the new CRR requirements, said Mr Gupta.
A PNB official told this paper on Thursday that although the bank had indicated that it had no immediate plans to hike PLR, the turn of events in the last few days and the need to protect shareholders' interest had prompted it to go in for the PLR hike. PNB had last increased its PLR by 25 basis points to 11.5% on August 1 this year.
Asked whether the latest PLR hike had any implications for home loan rates of the bank, the official replied in the negative and pointed out that the home loan rates are not linked to the benchmark PLR.
The move to hike PLR comes in the wake of the recent increase in deposit rates and also due to tighter liquidity conditions.
PNB had, on December 22 this year, increased deposit rates by 25-75 basis points for different maturities. Mr S.C. Gupta, Chairman and Managing Director of the bank, had on Saturday last maintained that there was no plan to hike PLR and that only sub-PLR rates would be realigned.
But the CRR hike and advance tax payments by corporates for December 15 instalment has led to a spurt in the call rates in the recent days and tightened liquidity conditions. Call rates have almost doubled since the RBI's announcement of a two-stage CRR hike. The first leg of the CRR hike has already come into effect from Saturday and the next stage would come into effect from January 6 next year.
However, unlike certain banks, PNB had not tapped the call money market for conforming to the new CRR requirements, said Mr Gupta.
A PNB official told this paper on Thursday that although the bank had indicated that it had no immediate plans to hike PLR, the turn of events in the last few days and the need to protect shareholders' interest had prompted it to go in for the PLR hike. PNB had last increased its PLR by 25 basis points to 11.5% on August 1 this year.
Asked whether the latest PLR hike had any implications for home loan rates of the bank, the official replied in the negative and pointed out that the home loan rates are not linked to the benchmark PLR.
NUMBER CRUNCHING HUTCH'S VALUE
More players are entering the fray to pick up a stake in Hutch. And as numbers are bandied back and forth, one thing is certain - the company's valuations are attractive. After all, Hutch clocks the highest revenues per minute, beating rivals Bharti Airtel and Reliance Communications hands down and while it lags behind its rivals, when it comes to average revenues per user, it pips them in the minutes of usage. On these terms, Hutch makes more per minute of usage, than either Reliance Communications or Airtel. Hutch also offers better value-added services, which helps boost its revenues.
For the third largest player, which commands a near-pan India presence, analysts are quoting an enterprise value of around USD 12-14 billion. Compared to Reliance Communication's enterprise value of USD 22 billion and Bharti's USD 26 billion, that's a pretty reasonable figure.
And that's not all! Going by these valuations, the cost of one Hutch customer works out to USD 556-646. It's bang in the middle of the range at which recent global deals have been clinched between USD 450 and 1,000 per subscriber, while that of Hutch's rivals works out at the higher end of the range.
The price at which the deal is finally struck, will determine exactly how attractive the purchase will be. It will also determine the final cost breakeven. And with so many players vying for a piece of the cake, the final price is anybody's guess.
For the third largest player, which commands a near-pan India presence, analysts are quoting an enterprise value of around USD 12-14 billion. Compared to Reliance Communication's enterprise value of USD 22 billion and Bharti's USD 26 billion, that's a pretty reasonable figure.
And that's not all! Going by these valuations, the cost of one Hutch customer works out to USD 556-646. It's bang in the middle of the range at which recent global deals have been clinched between USD 450 and 1,000 per subscriber, while that of Hutch's rivals works out at the higher end of the range.
The price at which the deal is finally struck, will determine exactly how attractive the purchase will be. It will also determine the final cost breakeven. And with so many players vying for a piece of the cake, the final price is anybody's guess.
VODAFONE CONFIRMS ITS PLANS TO ACQUIRE HUTCH
It's finally happened. Vodafone has finally confirmed that it is planning to jump into the fray for acquiring Hutch Essar, along with Reliance. "The board of Vodafone is considering the acquisition of a controlling interest in Hutch Essar in India. Such a transaction would be consistent with its stated strategy of seeking selected acquisition opportunities in developing markets," the company said in a statement. The process is at an early stage, and it may or may not lead to a transaction it further clarified.
Vodafone, a company not usually given to comment on speculation, made its position clear after consistent media reports that its board is meeting to consider making a $13 bn for Hutch Essar, and affected its share price negatively.
Vodafone has interests in emerging markets including Egypt, Romania and India - and underlined its ambitions for further expansion in similar markets at an investor meeting earlier this month. Vodafone's board believes that India's mobile market has great potential, the company said, justifying its interest. The news came after it unveiled a £3.3bn half-yearly loss in November as it was hit by higher interest rates, competition and some of its assets being worth less than it thought.
After Corus, this makes Hutch Essar the second planned takeover that moves into contested territory, and may spark off another bidding war with Reliance Communication.
ARE TATAS PAYING TOO MUCH FOR CORUS?
Once upon a time, in 2003, Corus was a penny stock. Bidders could buy the company for a few million dollars. But now it costs a few billions.
Andrzej Kotas, Chief Executive of steelonthenet.com says, “Now ofcourse the company is much more expensive, and therefore the opportunity is not quite the same. So there is question mark as to where actually is the upside for somebody like Tata."
The risks are higher because of the bidders' financing models. Analysts say both bids would use borrowed money for the deal.
Steel Expert, Mike Mytton says, “The concern that people would have in terms of Corus's future as a company would be that if there was a downturn in the steel market. The interest on those loans still has to be paid, and it is paid out of the cash flow of Corus.”
Analysts warn of risks like high production costs in Europe, overestimated steel demand and lower projected prices.
Steve Mackrell, Director-Operations of Iron & Steel Statistics Bureau says, “There certainly are some concerns about that. Because too much steel on the market will depress prices.”
Even so, the bidding battle goes on. And that could be dangerous. Lord Swraj Paul, Chairman of Caparo Group says, “It really has ended up in an auction. The two parties are bidding, somebody will either be told by their banks that no, we are not going to lend you any more money, or somebody will find that he fancies it enough, and he sees the value in it.”
There are enough indications to suggest that Tata should steel itself against bidding yet higher for Corus. But players in the global steel industry feel that the Tatas stand a better chance of bagging Corus, as the steel industries in the two countries involved can combine for better synergies.
Wilbur Ross, Board Member, Arcelor Mittal, says, “I believe there will be a very good chance that it (the deal) will be approved. I think there is good industrial logic to the Corus acquisition by Tata and I think it symbolises very much the consolidation of the steel industry that had really started with Lakshmi Mittal some 12 years ago.
Andrzej Kotas, Chief Executive of steelonthenet.com says, “Now ofcourse the company is much more expensive, and therefore the opportunity is not quite the same. So there is question mark as to where actually is the upside for somebody like Tata."
The risks are higher because of the bidders' financing models. Analysts say both bids would use borrowed money for the deal.
Steel Expert, Mike Mytton says, “The concern that people would have in terms of Corus's future as a company would be that if there was a downturn in the steel market. The interest on those loans still has to be paid, and it is paid out of the cash flow of Corus.”
Analysts warn of risks like high production costs in Europe, overestimated steel demand and lower projected prices.
Steve Mackrell, Director-Operations of Iron & Steel Statistics Bureau says, “There certainly are some concerns about that. Because too much steel on the market will depress prices.”
Even so, the bidding battle goes on. And that could be dangerous. Lord Swraj Paul, Chairman of Caparo Group says, “It really has ended up in an auction. The two parties are bidding, somebody will either be told by their banks that no, we are not going to lend you any more money, or somebody will find that he fancies it enough, and he sees the value in it.”
There are enough indications to suggest that Tata should steel itself against bidding yet higher for Corus. But players in the global steel industry feel that the Tatas stand a better chance of bagging Corus, as the steel industries in the two countries involved can combine for better synergies.
Wilbur Ross, Board Member, Arcelor Mittal, says, “I believe there will be a very good chance that it (the deal) will be approved. I think there is good industrial logic to the Corus acquisition by Tata and I think it symbolises very much the consolidation of the steel industry that had really started with Lakshmi Mittal some 12 years ago.
CAIRN INDIA PRICES IPO AT Rs. 160 PER SHARE
Cairn India Ltd, a unit of Britain's Cairn Energy Plc, priced its initial public offering at Rs 160 a share, at the bottom of an indicated price band, the company said on Monday, raising $1.18 billion. The weak pricing followed a lukewarm response from investors because of concerns over valuation and uncertainties about transporting the crude produced by it. Cairn India is now valued at $6.32 billion, instead of $7.5 billion if it was priced at the top end of Rs 160-190 band. The 328.8 million share offering scraped through with about 1.2 times subscription after a few institutions pulled out their bids on the last day. The poor response forced Cairn India to cut the offer price to investors, including Malaysia's state-run oil firm Petronas, who bought shares in a private placement recently. It now got about $750 million from the private placement, instead of $822 million expected earlier.
Shares are likely to begin trading in early January.
IDEA TO RAISE UP TO $642 Million IN IPO
Idea Cellular Ltd expects to raise up to Rs 28.75 billion ($641.7 million) in an initial public offering, the firm said in a regulatory filing. Idea did not say how much stock it planned to sell, but said it proposed to complete 15 per cent of the planned fund raising through a pre-IPO placement to a few institutions. Idea, which has more than 10 million subscribers, reported per share earnings of Rs 0.69 a share for the year ended March 2006. The firm is controlled by the diversified Aditya Birla group. It would use the funds to begin services in Mumbai, which is dominated by Hutchison Essar Ltd and Bharti Airtel Ltd, and to expand to more regions. Aditya Birla Nuvo Ltd, which has interests in retail, textiles, finance and fertiliser, is the largest shareholder in Idea with a 35.7 per cent stake. Grasim Industries Ltd. holds 7.6 per cent and Hindalco Industries Ltd has 10.1 per cent. The private equity arm of Citigroup holds 6 per cent and P5 Asia Investments holds 14.6 per cent, the offer document showed. Idea, founded in 1995 as Birla Communications Ltd has undergone many changes in shareholding with AT&T Communications Ltd. and the Tata family selling their stakes at different periods, leaving the controlling stake with the Birlas. Idea, which lags Bharti Airtel and Hutchison Essar Ltd, reported a total income of Rs 19.13 billion for the first half ended September 2006 and net profit was Rs 1.92 billion.
FED KEEPS INTEREST RATE UNCHANGED
The US Federal Reserve has kept the interest rates unchanged at 5.25% for the fourth consecutive meet. The Fed suggested a softer growth outlook while continuing to note inflation risks. the Federal Open Market Committee called the cooling of the housing industry -substantial, one of the few changes in language from its previous statement in October.
"The Fed has done what they have been indicating they will do. They are data dependent. The statement itself is less important. Friday's CPI numbers are more important in setting the Fed policy. They are worried about inflation, they hope it comes down. as far as we can see, the Fed is on hold for the time being," said James Bianco of Bianco Research.
"Not much has changed in their policy commentary when they announced they aren't going to move interest rates. Inflation had to be monitored and at the same time, becasue of weaker housing market, the economy is slowing. So there are risks in both directions. So they are firmly on hold for now and the Fed is very data dependent. If the data continues to point to moderating inflation and slowing growth, we believe they will cut rates next year," said Alec Young of Standard & Poor's
"I expect they will be on hold for quite a while because there is a lot of inertia in policy making process. The next move by the Fed will be down because what they have done to fight inflation. We are seeing 5.25% on the Fed Funds rate," said Robert McTeer, Former President, Federal Reserve Bank of Dallas.The Fed Reserve's stance would seem to be at odds with the views of most economists, who anticipate that Bernanke will have to cut borrowing costs as the economy slows down. But an expanding labour market and rising incomes have kept Bernanke and his colleagues focussed on inflationary risks even as manufacturing and home sales slump.
"The Fed has done what they have been indicating they will do. They are data dependent. The statement itself is less important. Friday's CPI numbers are more important in setting the Fed policy. They are worried about inflation, they hope it comes down. as far as we can see, the Fed is on hold for the time being," said James Bianco of Bianco Research.
"Not much has changed in their policy commentary when they announced they aren't going to move interest rates. Inflation had to be monitored and at the same time, becasue of weaker housing market, the economy is slowing. So there are risks in both directions. So they are firmly on hold for now and the Fed is very data dependent. If the data continues to point to moderating inflation and slowing growth, we believe they will cut rates next year," said Alec Young of Standard & Poor's
"I expect they will be on hold for quite a while because there is a lot of inertia in policy making process. The next move by the Fed will be down because what they have done to fight inflation. We are seeing 5.25% on the Fed Funds rate," said Robert McTeer, Former President, Federal Reserve Bank of Dallas.The Fed Reserve's stance would seem to be at odds with the views of most economists, who anticipate that Bernanke will have to cut borrowing costs as the economy slows down. But an expanding labour market and rising incomes have kept Bernanke and his colleagues focussed on inflationary risks even as manufacturing and home sales slump.
GOVT. LIMITS POWER IPO SIZE AT 10% OF POST-ISSUE CAP
The government has decided to limit the size of the initial public offers (IPOs) of four state-run power companies to 10% of their post-issue capital in first phase and the process is to be completed by March 2007. The companies would be expanding their capital by issuing fresh shares that would account for 10% of the capital in the first phase, power secretary R V Shahi said.
The government has cleared the IPOs of Power Finance Corporation (PFC) National Hydroelectric Power Corporation (NHPC), Rural Electrifiction Corporation (REC) and Power Grid Corporation of India (PGCIL). For NHPC and PGCIL, the Cabinet has approved issuing of fresh shares to the tune of 24% of its capital, while for REC the clearance is for 20% in tranches. For PFC, the Cabinet approval is for 10.22%. NHPC has even got the nod to sell its shares in the international markets. Shahi said PFC’s IPO would be the first one to hit the market in January or at most February. “We would like to complete the entire process by March,” he added. Of these companies, the IPO of NHPC could be the largest. With a share capital of Rs 10,349 crore, NHPC would be able to offer shares worth up to Rs 2,500 crore at a premium. The company has an authorised capital of Rs 15,000 crore. For PFC, it would be another shot at the IPO. Its first attempt at entering the market was aborted as the government went back on its decision to disinvest 5% shares in the company, along with the IPO, following stiff opposition from its allies.
J.K. CEMENT PLANS TO ACQUIRE 1.5-mt CAPACITY PLANT
J.K. Cement is exploring the possibility of acquiring a cement plant with a capacity of about 1.5 million tonnes as part of its expansion plan.
It is not averse to shedding some equity for this purpose. "We would be open to shedding equity depending on what type of value it gives us," the J.K. Cement Chief Financial Officer, Mr AK Saraogi told Business Line. As per the current equity structure, the promoters' holding is 62% while the rest is with the FIIs and the public.
The company plans to add 4 million tonnes of capacity in the next 5 years. This will entail an investment of between Rs 3,500 crore and Rs 4,000 crore. Mr Saraogi said the expansion will be both through the organic and inorganic route.
He said in the medium term, he does not see any margin pressure. Currently, the cash profit margins are as high as between 25% and 30% compared with between 5% and 10%over a year ago. Mr Saraogi said that with such high margins, cement manufacturers including theirs are now willing to expand capacities.
It is not averse to shedding some equity for this purpose. "We would be open to shedding equity depending on what type of value it gives us," the J.K. Cement Chief Financial Officer, Mr AK Saraogi told Business Line. As per the current equity structure, the promoters' holding is 62% while the rest is with the FIIs and the public.
The company plans to add 4 million tonnes of capacity in the next 5 years. This will entail an investment of between Rs 3,500 crore and Rs 4,000 crore. Mr Saraogi said the expansion will be both through the organic and inorganic route.
He said in the medium term, he does not see any margin pressure. Currently, the cash profit margins are as high as between 25% and 30% compared with between 5% and 10%over a year ago. Mr Saraogi said that with such high margins, cement manufacturers including theirs are now willing to expand capacities.
CAIRN INDIA ISSUE TO OPEN ON MONDAY
The Cairn India’s Initial public offer (IPO) is set to open as scheduled on Monday, even as the company is embroiled in a battle with public sector behemoth ONGC, over evacuation of crude from the Rajasthan fields. Earlier this week, Sebi had asked Cairn to respond to ONGC’s claim that Cairn India had not made adequate disclosures with respect to the evacuation of crude. “We have replied to MRPL...the correspondence continues, we have also informed Sebi of the developments,” said an official with a merchant banker to the issue.
This was also corroborated by Cairn India. Says David Nisbet, director — group communications, Cairn India: “We are in the process of responding to the authorities on the clarifications sought. Our issue is on schedule and opens on Monday.” However, a senior MRPL official denied having received any communication from Cairn. The dispute arose when MRPL, being the government nominee to evacuate the Rajasthan crude, filed a complaint with Sebi alleging “partial disclosure of facts” in Cairn’s red herring prospectus for the IPO. According to MRPL, the disclosures pertaining to the offtake of crude from Rajasthan fields were not accurate.
MRPL has disputed Cairn’s disclosure, which states that the production schedule may be delayed due to MRPL’s failure to keep its commitment to construct the pipeline for the transporting crude. According to MRPL, the pipeline was supposed to be built as a joint commitment in the interim period to build a refinery. However, the joint venture to explore the feasibility of building a refinery was not established.
NO FULL STOPS IN INDIA FOR FOREIGN FUNDS
There seems to be no dearth of foreign institutional investors (FIIs) looking to pour money into Indian equities although the breadth is poor. Their only problem may be that there are not enough opportunities available for now, considering that frontline stocks have risen sharply over the past few months. But that does not appear to be a deterrent for overseas investors, especially hedge funds, which see India as key in the emerging market univers
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