Indian IPO

All details about Hot Indian Primary Market.

Wednesday, October 25, 2006

Metro Tyres to issue IPO of Rs 100cr

Eyeing to increase its share in the indigenous and international markets, Metro Tyres is set for expansion with an initial public offering, IPO of Rs 100 crore (Rs 1 billion) for enhancing production at two-wheeler tyre-manufacturing units in Ludhiana, reports Business Standard.

Since the demand for two-wheeler tyres had gone up tremendously in the past few years in the country due to increase in the sale of motorbikes, the time was ripe for the company to increase production to meet the demand, company sources said, stating that an IPO of at least Rs 100 crore had been planned

Sources said the company had planned to increase production at its four production facilities in Ludhiana and increase the production of its “Metro Continental” tyres from 25,000 to 50,000 pieces per month, for which Rs 10 crore had been earmarked.

Metro is targeting producing 1,00,000 tyres more by the end of the year and it is considering setting up a manufacturing facility for this.

The Metro Continental brand of tyres are manufactured at one of the company’s high-tech plants in Ludhiana with state-of-the-art technology provided by Continental AG of Germany and the company had invested Rs 40 crore in this unit, sources said.

Part of the machinery for this plant has come from Continental and the rest is being sourced from other leading manufacturers abroad.

“We have four manufacturing plants in Ludhiana, one in Gurgaon and one in Noida. All our Ludhiana units have the capacity to produce 1,00,000 two-wheeler tyres and tubes a day,” said Rummy Chhabra, managing director of Metro Tyres.

“We manufacture bicycle tyres in Ludhiana and Gurgaon, apart from 30,000 motorcycle tyres a month, whose capacity will now be increased to 1,00,000 tyres per month after our investment of Rs 10 crore,” he said.

The company produces 3 million tyres every month, and it has a 10% market share, he added.

“We are working on modalities to expand over manufacturing facilities. We have become the country’s first two-wheeler tyre manufacturer to obtain the Economic Commission for Europe, ECE approval for exporting motorcycle tyres and have started dispatching to Continental,” he said.

Tuesday, October 24, 2006

Raj television files DHRP with Sebi

Raj Television Network, Raj TV, the largest regional satellite television broadcaster in Tamil Nadu, has filed the draft red herring prospectus, DRHP with the Securities and Exchange Board of India, Sebi to enter the capital market with its initial public offer, IPO of equity shares, as per press release.

The company proposes to enter the capital market with an offer of 35,68,250 equity shares of face value of Rs 10 each at a price to be decided through the book building process, consisting of a fresh issue of 22,70,700 shares by Raj TV Network and an offer for sale of 12,97,550 equity shares by selling existing shareholders holding.

The net issue to the public is upto 32,43,866 equity shares and a reservation of upto 3,24,384 equity shares for the eligible employees of the company. The issue constitutes 27.50% of fully diluted post issue paid up capital of the company.

Upto 50% of the net offer to the public shall be allocated on proportionate basis to qualified institutional buyers (including 5% for Mutual Funds). Further, not less than 15% of the net offer to the public shall be available for allocation on a proportionate basis to non institutional bidders (HNI) and not less than 35% of the net offer to the public shall be available for allocation on a proportionate basis to retail bidders, subject to valid bids being received at or above the Issue Price.

The objects of the issue are to strengthen the existing facilities, enhance content and content acquisition, launching a new Television Channel, extending the broadcasting of channels to international markets, produce Short-films/ Tele-films, acquisition and export of films in international market, construct new studio premises and finance general corporate purposes.

The sole book running lead managers to the issue is Vivro Financial Services (p).

Raj TV Network is presently engaged in broadcasting two widely viewed channels ‘Raj TV’ and ‘Raj Digital Plus’ (“Raj TV Network”), which together make the company one of the largest regional satellite television broadcasters in Tamilnadu.

Raj TV network provides programmes ranging from films, serials, game shows, classical concerts and programmes related to spiritual tourism apart from discourses by spiritual gurus. The company also holds broadcast rights for spiritual programmes of more than 1000 hours of content with potential to add aggregate 100 hours of content every year.

Wednesday, October 18, 2006

Indian Bank to hit capital market with IPO of 8.9cr shares

State-owned Indian Bank is likely to come out with an IPO of 8.9 crore shares in January next year, to raise Rs 800-1200 crore (Rs 8-12 billion) to augment its capital base and support business expansion, reports agencies.

"About 8.9 crore shares will be offloaded at a price to be decided through the book-building process," a senior Indian Bank official said.

This is 25% of the paid up capital of Rs 343.82 crore or 34.382 crore shares.

After the IPO, slated for January-end or February first week, the government holding will come down by 25% to 75% in the bank.

The Chennai-based bank is coming out with the IPO after a capital restructuring carried out last month.

Out of the Rs 743.82 crore paid up capital, the bank has converted Rs 400 crore into non-cumulative preferential shares and placed them with the Government. Indian Bank will pay an interest of 8% per annum for the preference capital.

"We will try to identify merchant bankers next week for the IPO, which should come by January-end or early February," Indian Bank Chairman A K Chakrabarty said.

He said the amount raised from the IPO would be used for meeting Basel II norms as well as to fund expansion plans.

Indian Bank along with Central Bank have been permitted by the government to go for IPOs after restructuring of their capital while United Bank is awaiting clearance for its IPO.

These are the three public sector banks in which, the government holds 100% stake.

IPO of the third bank -United Bank -will also be cleared "very soon", banking secretary Vinod Rai said.

C&C Constructions files DRHP with Sebi

C&C Constructions, an infrastructure project development company, has filed its draft red herring prospectus, DRHP with Sebi for its forthcoming initial public offer, IPO. The company proposes to make an initial public offer through 100% book building issue, as per press release.

The public offer will constitute 54,77,634 equity shares of Rs 10 each. The issue shall constitute 30% of the fully diluted post-issue capital of the company.

Edelweiss Capital is the book running lead manager to the Issue

The net proceeds of the issue are intended to be used for funding the company’s capital expenditure requirements, augmenting its working capital resources and for investment in various Build Operate and Transfer projects.

The company, incorporated in July 1996 is an infrastructure project development company that provides engineering, procurement and construction services for infrastructure projects in India and Afghanistan. C&C Constructions Ltd. has been involved in transportation engineering projects including roads, bridges, flyovers and airport runways. The company’s clients include names like National Highway Authority of India, Airport Authority of India, Public Works Department of various State Govts, Punjab Infrastructure Development Board, PWD Afghanistan, RITES Limited etc.

Oil India likely to float Rs 1300cr IPO

Close on the heels of the British upstream exploration company Cairn Energy announcing Rs 1300- crore initial public offering, IPO, government-owned oil exploration company Oil India plans to tap the capital market with an IPO. Bulk of its assets are based in eastern India, reports Business Standard.

According to top sources in the ministry of petroleum and natural gas, the company’s proposal to hit the capital market for expanding its equity base by about 10% is being studied by the ministry and is likely to be finalised before December. Merchant bankers have not yet been appointed for the proposed issue.

The company has proposed to hit the markets by the end of the current fiscal year that ends in March 2007. Sources, however, pointed out that the Left parties were opposed to the proposed IPO.

Currently, the government holds 98.13% stake in the company. This will come down proportionally following the public offer. Oil India has a paid up capital of Rs 214 crore (Rs 2.14 billion).

Proceeds from the IPO are expected to be used for picking up a 25% stake in Hindustan Petroleum’s nine million tonne refinery in Bhatinda as well as for a possible stake in the Numaligarh Refinery Ltd’s city gas project in Assam, valued at around Rs 500-600 crore (Rs 5-6 billion). Oil India had reported a net profit of Rs 1689.9 crore (Rs 16.89 billion) on a gross turnover of Rs 4617.65 crore (Rs 46.17 billion) last year. The company’s networth is estimated at Rs 5,848.3 crore (Rs 58.48 billion).

Oil India produced 3.23 million tonne of crude oil and 5 mmscmd of gas in FY 05-06. It has interests in 14 fields in India of which seven are onshore and four are offshore and the rest deepwater offshore.

It also has overseas operations in Nigeria and Libya. It picked up an exploration block in Libya early this month along with Indian Oil Corporation.

Friday, October 13, 2006

Cairn India files for $ 1.5-2 billion IPO

Investors have a big one coming their way - a chance to buy into a multinational oil company. Cairn India will float a public issue through which it hopes to mop up between USD 1.5 billion and USD 2 billion this year, reports CNBC-TV18.

It will be the biggest public issue. And for the investor, the best chance to own part of a multinational oil company. Cairn Energy's Indian subsidiary, Cairn India has filed for a USD 1.5-2 billion IPO with Sebi and plans to list in India by December.

The company will offer 53.84 crore new shares. Part of the proceeds will be used to fund expansion. And a large chunk will pay for assets it will buy at a premium from its parent.

"Given the success of the business and the significant discoveries made, the value we have created is far in excess of the investments we made," said Rahul Dhir, CEO, Cairn India.

Cairn India's main assets, in Gujarat and Rajasthan, have reserves of 6.2 billion barrels of oil. Cairn India will invest nearly USD 1 billion to develop the Balmer basin, which is estimated to have reserves of 3.6 billion barrels of oil equivalent. It plans to take the oil fields commercial by 2010. Cairn India has 70% development stake in these fields and ONGC has the rest.

'We have just initiated a 7 well campaign in Ravva. We are doing a lot of offshore work in Cambay. There is a broad scope of activity and the Rajasthan numbers gives a sense of what we will spend as a minimum,' said Rahul Dhir.

The company is valued at USD 6.5 billion on the upper end of the price band and Cairn India might also consider a pre-IPO placement. It expects revenues of USD 300 million this year. And with crude prices hovering around USD 60, this issue seems set to excite the market

Angel Broking for private placement, IPO after expansion

Leading broking firm Angel Broking, which is currently in an aggressive expansion mode, has drawn up plans for private placement and public offer, reports The Economic Times.

"We will make private placement and subsequently will go for a public offer from 2008 onwards," Angel Broking Dinesh Thakkar said.

"In 2007-08 financial year, we plan to raise Rs 100-150 crore (Rs 1-1.5 billion) in private placement and another Rs 150 crore (Rs 1.5 billion) would be raised in offering stake to preferably a foreign strategic investor who will help us in reaching the global market," he said.

Public offer will follow later, Thakkar said.

Angel Broking was aiming to open 400 offices across the country over the next three to four years. Currently, it has 68 branches, 12 regional hubs and over 1,000 outlets.

"In the current year we will put Rs 25 crore for expansion," Thakkar said.

The company recently opened an office in Kolkata to expand its footprint in the entire eastern region. The company has 1,57,000 retail customers and offers brokerage business for the National Stock Exchange, the Bombay Stock Exchange and commodity exchanges.

Wednesday, October 11, 2006

UAE Exchange eyes banking in India, plans Rs 100 cr IPO

The UAE Exchange and Financial Services may enter the Indian banking industry, provided the licence is granted by the RBI. Recently, it has been granted authorised dealers (AD) category-2 license by RBI. “We have written twice to RBI about getting banking licence, but we don’t expect to get the it before 2009,” said BR Shetty, chairman and managing director of UAE Exchange group. The AD category-1 license in given to banks only.

“We target to remit Rs 11,000 crore from the middle-east to India by the year-end and shore up the earnings to three times its present level,” said Shetty. “The UAE Exchange group will come out with its initial public offer (IPO) totaling Rs 100 crore in the first half of next fiscal,” he added. Its current paid capital is Rs 35 crore.

“UAE Exchange plans to open 100 more branches in the country this year and has already got license to open a branch in Singapore,” he added. Talking about the other business interests of the group, Shetty said, “We have plans to venture into hotel, hospitals and real estate (both retail and commercial) businesses in India and hope to finalise acquisition of a Kerala-based resort in the next six months.” The group already possesses lands in a few cities viz. Bangalore, Mangalore, Kochi and Thiruvananthauram.

House of Pearl Fashions files DRHP with Sebi

House of Pearl Fashions, HoP Fashions filed its draft red herring prospectus, DRHP on October 10, 2006 with the Securities & Exchange Board of India, Sebi for its initial public offering, IPO of equity shares. HoP Fashions is a multinational, ready-to-wear apparel company operating in three distinct business streams: manufacturing, marketing & distribution and sourcing of garments, as per press release.

The company proposes to offer 61,20,600 equity shares of Rs 10 each for cash at a price to be determined through the 100% book-building process, comprising a fresh issue of 48,95,400 equity shares by the company and an offer for sale of 12,25,200 equity shares by the promoters. There will be a reservation for Indian employees of 1,22,600 equity shares of Rs 10 each. There will also be a green shoe option of 6,12,060 equity shares of Rs 10 each.

The equity shares will be listed on the National Stock Exchange and Bombay Stock Exchange.

At least 50% of the net offer to the public shall be allocated on proportionate basis to qualified institutional buyers and 15% of the offer is reserved for non-institutional investors. 35% of the offer is reserved for retail investors.

JM Morgan Stanley Private Limited is the sole book running lead manager for the IPO.

Tuesday, October 10, 2006

Fortis to acquire Guru Nanak Hospital for Rs 3 bn

Ranbaxy Group-promoted Fortis Healthcare is likely to acquire Mumbai-based Guru Nanak Hospital & Research Centre for roughly Rs 2-3 billion, reports Business Standard.

Fortis which is planning to raise Rs 7-9 million through an initial public offering (IPO), had made the biggest acquisition in Indian healthcare a year ago when it bought Escorts Heart Institute & Research Centre for Rs 6500 million.

The target this time is a 150-bed general hospital in Bandra, Mumbai, which will provide Fortis a presence beyond north India.

A strategic alliance has been signed between Fortis and Guru Nanak Hospital.

Fortis has been looking for a pan-India presence for some time and it will be replicating the model it followed in Delhi across the country.

Zenith Birla announces FPO of 2.38cr equity shares

Zenith Birla (India), a Yash Birla Group Co, announced a follow-on public offer of 2.38 crore equity shares of Rs 10 each at a price of Rs 55 per share, reports The Hindu Business Line.

The company's shares closed on Monday at Rs 64.25 on the BSE.

The proceeds of the issue aggregating to Rs 131 crore (Rs 1.31 billion) will fund a new facility to manufacture mechanical (CDW) tubes primarily for automotive application and also meet its working capital needs. The company currently makes steel pipes and machine tools.

The issue opens on October 16 and closes on October 20. Net offer to the public is 96.36 lakh equity shares aggregating Rs 53 crore (Rs 530 million). Promoters will buy 45.45 lakh equity shares costing Rs 25 crore.

Employees and directors of the company, existing shareholders and shareholders of group companies will receive 19.27 lakh equity shares each.

NRIs and FIIs will be allotted 19.27 lakh shares and banks/mutual funds/Indian financial institutions will also get same number of shares. The total issue will form 59% of the post-issue paid-up capital of the company.

The new plant at Khopoli in Maharashtra will have an installed capacity of 60,000 tonnes per annum and commercial production is scheduled for December 2007.

"We plan to focus on automotive and oil and gas industry as there is a demand — supply gap in CDW tubes," said Arun Jain, executive director, Zenith Birla.

IDBI Capital Market Services and Keynote Corporate Services are the lead managers to the issue.

The company posted a net profit of Rs 2.93 crore (Rs 29.3 million) for the quarter ended June 2006.

Monday, October 09, 2006

Barclays bids for 5% in DCB

British banking major Barclays Group seems to be on an investment overdrive. It is learnt to have bid tad less than 5% equity in the recently concluded Development Credit Bank’s, DCB initial public offering, IPO. Other institutions, which have put in significant bids, are Canara Bank, IDFC and Reliance Capital, reports The Economic Times.

The price band for the DCB IPO, which ended on October 6, was fixed at between Rs 22-26. The bank is making a fresh issue of 7.15 crore shares, which would help it raise Rs 157-185 crore (Rs 1.57-1.85 billion).

Canara Bank is said to be the biggest bidder in the IPO and has put in a bid of over Rs 100 crore (Rs 1 billion). IDFC and Reliance Capital have also bid for over Rs 100 crore. FIIs, which have also put in significant bids, include Sovereign Global and Sandstone Capital. Public sector banks have in the past couple of years put in major bids in bank issues. However, they normally exit post-listing. Sources said Barclays has put in a bid for 4.9% of the enlarged share capital of the bank. The group has bid through Barclays Capital Mauritius.

Though the investment size would be much smaller than other major bidders, this could be possibly for the first time that a foreign bank is looking at investment through an IPO. This would be the second investment by the group in a private sector bank. It had last year picked up a stake in UTI Bank and currently has a shareholding of 4.95%. This is likely to be a portfolio investment for the UK group.

The group has been slowly increasing its presence in India. Barclays had last month invested USD 380 million in AAA Global Ventures, and acquired a non-banking finance company Rank Investments and Credits for USD 7.5 million. The group would infuse fresh capital to increase its total investments in the NBFC to USD 50 million. It is currently awaiting regulatory approval.

It has recently started the global retail and commercial banking division in India. This is the division’s maiden launch in Asia. The new vertical will do high-end corporate banking, SME, trade finance, cash management, supply chain management asset-based finance like leasing and will also get into retail in due course. The group is looking at investing USD 70 million in ’06 and ’07 for its corporate banking venture in the country.

The DCB IPO has seen an over-subscription of 36 times. Qualified institutional buyers, QIBs, which were eligible for 50% of the IPO, have put in bids of 37.9 times, institutional investors including HNIs which were eligible for 15% have put in bids of 84 times and the retail portion saw an oversubscription of 15 times.

After the issue, Aga Khan Fund for Economic Development’s, AKFED stake in the bank will come down to 30.13% from 58.43%. The bank will not make any fresh equity allotment for the next six months.

IFC considering $45mn equity investment in Cairn India

International Finance Corporation, IFC, the private lending arm of the World Bank, plans to invest upto USD 45 million in equity in Cairn India. IFC on its website said: "IFC is considering an equity investment in Cairn India in the form of ordinary shares of upto USD 45 million equivalent”, reports The Hindu Business Line.

Equity participation

Cairn India, a wholly owned subsidiary of the Scottish major Cairn Energy, is planning an initial public offer of upto 50% equity shares later this year. Following the IPO, the parent is expected to remain a significant shareholder in the company.

According to sources, the percentage of equity participation of IFC is yet to be worked out. This proposal by IFC would be over and above the USD 1 billion loan the corporation is extending to Cairn with 13 other banks and financial institutions for development in Rajasthan oilfields.

Cairn recently said that it plans to begin oil production from its Rajasthan blocks in early 2009.

The company expects an output of 150,000 barrels per day. ONGC has a 30% stake in an oil and gas block in Rajasthan, where Cairn Energy holds the remaining stake and is the main operator.

Cairn India's primary asset is 70% working interest in a development area in Rajasthan. In January 2004, it discovered the Mangala oil field.

In addition, Cairn India's key assets include operated interests in producing fields at Ravva in Block PKGM-1 (22.5% working interest) in the Krishna-Godavari Basin offshore Eastern India and at Lakshmi and Gauri in Block CB/OS-2 (40% working interest) in the Cambay Basin offshore Western India. Further, Cairn India has interest in a number of exploration blocks across India. The company's medium term capital expenditure program will focus primarily on Rajasthan and is expected to comprise additional exploratory, appraisal and development drilling as well as the construction of oil and gas processing and export facilities.

It will also include a component covering further exploration and development in currently producing fields as well as exploration in non-producing fields.

Advanta India files DRHP with Sebi

Advanta India, one of the leading international agronomic seed companies with principal operations in India, Australia, Thailand and Argentina, which is a wholly-owned subsidiary of United Phosphorus, filed its draft red herring prospectus, DRHP with the Securities and Exchange Board of India, Sebi on September 29, 2006 to enter the capital market with its initial public offering, IPO of equity shares, as per press release.

The company proposes to issue 50,57,000 equity shares of Rs 10 for cash at a premium to be decided through the 100% book-building process for listing on both Bombay Stock Exchange and National Stock Exchange.

The company is considering a pre-issue placement of upto 16,85,600 equity shares with certain investors. The company will complete the issuance of such equity shares prior to the completion of this issue. If the pre-issue placement is completed, the issue size offered to the public would be reduced to the extent of such pre-issue placement, subject to a minimum issue size of 10% of the post-issue paid-up capital being offered to the public.

If the issue size is 25% or more of the post-issue paid-up capital, of the total issue size, at least 50% of the issue shall be allotted on a proportionate basis to qualified institutional buyers, QIBs of which 5% of the issue shall be available for allocation to mutual funds only and the remaining QIB portion shall be available for allocation to the QIB bidders, including mutual funds, subject to valid bids being received at or above the issue Price.

In that case, at least 15% of the issue shall be available for allocation on a proportionate basis to non-institutional bidders and at least 35% of the issue shall be available for allocation on a proportionate basis to retail individual bidders, subject to valid bids being received at or above the issue price.

If, as a result of the pre-issue placement, the issue size is reduced to an extent such that the issue constitutes less than 25% of the post-issue paid-up capital of the company, the issue would be made through the 100% book-building process where at least 60% of the issue would be allotted on a proportionate basis to QIBs. 5% of the issue comprised in the QIB portion would be available for allocation to mutual funds only and the remaining QIB portion would be available for allocation to the QIB bidders, including mutual funds, subject to valid bids being received at or above the issue price.

Further, in that case, upto 10% of the issue would be available for allocation on a proportionate basis to non-institutional bidders and up to 30% of the issue would be available for allocation on a proportionate basis to retail individual bidders, subject to valid bids being received at or above the issue price.

The company believes that it is a global leader in technical plant breeding and in the application of biotechnology to develop new hybrids and varieties of field crops and broad acre vegetable seed products, including sorghum, canola, sunflower, corn, hybrid rice and hybrid mustard. Its research and development efforts are in the areas of superior breeding programs and bioscience techniques that have driven the development of a portfolio of elite, proprietary and highly differentiated germplasm.

Headquartered in Bangalore, India, the company is active in the research, production and sales of a range of hybrid cereal and oilseed crops. Its key crops in India are rice, sunflower, corn, millet, grain sorghum, forage sorghum and mustard.

The book running lead managers to the issue are Yes Bank, UBS Securities India Private Limited and SSKI Corporate Finance Private Ltd.

iServiceGlobal plans IPO

iServiceGlobal, a Palo Alto (US)-based enterprise business solutions provider, has announced plans to expand its Hyderabad operations, reports The Hindu Business Line.

The president and chief executive officer of iServiceGlobal, Srini Katta, met the chief minister, YS Rajasekhara Reddy, to explain the expansion plans.

The company, which provides customer relationship management solutions, has revenues of USD 80 million and has projected revenues of USD 100 million by 2007. The management of iServiceGlobal is exploring the potential of tapping the market some time in 2007.

Wednesday, October 04, 2006

HSBC forecasts 50 property IPOs next year

India will have at least 50 property-related initial public offerings, IPO in the next year as the real-estate industry booms, said Anish Jhaveri, HSBC Holdings’ head of equity sales in Asia’s second most populous country, reports The Financial Express.

“With the opening of the real-estate sector, there is a lot of need for funds,” Jhaveri said. “The government has been giving very proactive support to the whole sector.”

The real-estate market in India is worth about USD 12 billion and is growing at about 30% a year, Ernst & Young said in a September 21 report commissioned by the Federation of Indian Chambers of Commerce and Industry. Rising incomes, easy financing and population growth are driving demand for housing in India, a nation of 1.1 billion people, and luring overseas investors.

“The appetite for real-estate IPOs will be there,” KK Mital, chief investment officer at Escorts Asset Management in New Delhi said. “The young workforce is looking for real-estate investment, and the financing is available - the banking system is supporting this growth.”

Jhaveri said venture capitalists and overseas investors are poised to invest over USD 5 billion in India’s real-estate sector, without providing more details. “People are seeking more clarity” on possible changes to property regulations before investing, he said.

His forecast takes into account the possibility that India may allow real-estate investment trusts, or REITs, to invest in the nation’s property industry. Still, of the 50 real estate related IPOs that he predicts will take place in the next year, only a ‘small’ number will be REITs, he said.

In the past year, India had eight initial share offerings by engineering and construction companies, which raised USD 478 million, according to Bloomberg data. That compares with the six IPOs raising USD 304 million in the previous 12-month period.

Indian billionaire Kushal Pal Singh’s real-estate company, DLF Universal, is seeking to revive the nation’s biggest share sale after regulators decide on a complaint by shareholders. The New Delhi-based company plans to submit offer documents to regulators, paving the way for an IPO by early December, Saurabh Chawla, the company’s finance vice president, said.

The developer, which was publicly traded until 2003, withdrew its IPO in August after a group of minority investors claimed they missed the chance to increase their stakes when DLF sold convertible bonds without notifying all shareholders.

Indian real-estate companies “have a better chance of getting listed” than those in other industries, analysts Manishi Raychaudhuri, Suhas Rema Harinarayanan and Anand Agarwal wrote in a September 28 UBS AG report.

Fortis Healthcare files DRHP with Sebi

Fortis Healthcare, which believes that it is one of the largest private healthcare companies in India, based on the number of hospital beds according to information provided by CRIS-INFAC’s report published in 2005, and promoted by the promoters of Ranbaxy Laboratories, has filed its draft red herring prospectus, DRHP with the Securities and Exchange Board of India, Sebi on September 29, 2006 with its proposal to enter the capital market with its initial public offering, IPO of equity shares, as per press release.

The company proposes to offer 5,66,66,633 equity shares of Rs 10 each for cash at a premium to be decided through the 100% book-building process to be listed on the Bombay Stock Exchange and the National Stock Exchange.

Fortis Healthcare also proposes to allot 5,00,000 equity shares to eligible employees of the company in the firm allotment portion.

Of the net offer to the public, at least 60% of the offering will be allocated to qualified institutional buyers on a proportionate basis, 5% of which will be available for allotment to mutual funds registered with the Securities and Exchange Board of India. Not less than 10% of the offering will be available for allocation to non-institutional investors and not less than 30% of the offering will be available for allocation to retail investors on a proportionate basis.

Fortis Healthcare currently has a network of 12 hospitals primarily in north India and 15 satellite and heart command centers in hospitals across the country and one heart command center in Afghanistan. The hospitals include multi specialty hospitals, as well as super-specialty “centers of excellence” providing tertiary and quaternary healthcare to patients in key areas such as cardiac care, orthopaedics, neuro-sciences, renal care, pulmono –thoracic surgery and diabetic care. Besides these, the company also manages Fortis La Femme, a “boutique” style hospital that focuses on women’s health and maternity care.

The book running lead managers to the issue are JM Morgan Stanley Private Limited, Citigroup Global Markets India Private Limited and Kotak Mahindra Capital Company Limited.

Ind Synergy files DRHP with Sebi

Ind Synergy, an existing profit making company, has filed its draft red herring prospectus, DRHP on September 28, 2006 with the Securities and Exchange Board of India, Sebi to access capital markets with its initial public offering, IPO of equity shares, as per press release.

The company is engaged in diversified lines of business comprising of production of steel products including billets, sponge iron, real estate, soya oil extraction and de - oiled cakes, power from waste gases and wind mills, wheat products and mining.

The company proposes to offer 2,00,00,000 equity shares of Rs 10 each for cash at a premium to be decided through the 100% book-building process. The net public offering would constitute 39.18 % of the fully diluted post issue paid up capital of the company.

Promoted by Satish Goel, the company proposes to set up an integrated steel plant of capacity of 2,40,000 MTPA for production of stainless steel and alloy long products and alloy seamless product adjacent to the existing facilities at Raigarh district of Chhattisgarh, which is scheduled to be completed by April-June quarter, 2008. The object of the issue is to part finance this project besides meeting public issue expense and the expenses for general corporate purposes.

UTI Securities is the sole book running lead manager to the issue.

Dabur Foods pins turnover rider to IPO

Dabur Foods, the wholly owned subsidiary of Dabur India, plans an initial public offering, IPO once it hits the Rs 300-crore (Rs 3 billion) mark. The company is near that target having closed the last financial year at Rs 191 crore (Rs 1.91 billion), reports Business Standard.

With sales of its leading juice brands Real growing more than 30% Dabur Foods should be in a position to go for the public offering in less than two years.

Amit Burman, CEO, Dabur Foods said the company would list itself to unlock shareholder value once sales reach Rs 300 crore. He added the company targets Rs 500 crore (Rs 5 billion) by 2010.

Burman said that Dabur Foods apart its juices portfolio, comprising Real, Real Activ and Coolers, the company is also banking on trebling its exports and increasing its institutional business.

While the mother brand Real has already crossed Rs 100 crore in sales, the company hopes that both Real Activ and Coolers will each be Rs 100 crore (Rs 1 billion) brands by 2010.

Currently, Activ is Rs 40 crore brand, while the recently launched Coolers is Rs 6 crore. Burman said the juice brands will grow on the basis of increased distribution and an enhanced rural presence.

“We will enter the rural markets with Coolers which is at a lower price point than our other brands. Other beverage brands will follow the same later,” said Burman.

Burman reiterated that Dabur will focus on foods, once the beverage brands gain a critical mass. “We will focus on beverages for few years. After Activ and Coolers reach a certain stage, we will focus on foods,” said Burman.

The foods portfolio of Dabur Foods consists of cooking pastes Hommade, lemon drink concentrate Lemoneez and the Capsico range of pepper sauces.

The company also has an institutional brand, Nature’s Best that makes sauces for pizza chains like Domino’s. Burman added the company would later look at introducing sub-brands.

He said while the company was not actively looking at acquisitions, Dabur Foods would certainly consider a buy in the processed foods space.

“Exports will be the other growth area,” said Burman. Currently, the branded (Real) and bulk (concentrates, pulps) exports together constitute Rs 30 crore, which is likely to go up to Rs 100 crore in four years. “We will also start exports to countries in south east Asia soon,” he said.

Having discontinued their distribution arrangement with the Sri Lankan tea brand, Dilmah last year, Burman said the company would not look at such associations in future, as it wanted to concentrate on growing its brands.

REC mulls initial public offering

In order to access funds for its lending plans, Rural Electrification Corporation, REC is working towards an initial public offer, IPO and is awaiting the Cabinet approval to tap the market, reports The Hindu Business Line.

Its IPO plans have received positive response from the Power Ministry and the Cabinet approval would mean it could tap the market within the next six months, according to the chairman and managing director of REC, A K Lakhina.

Lakhina, who was in Hyderabad to sign up with four Rural Electric Cooperative Societies, said REC had become an important element of the country's power expansion drive and now requires to access public funds to meet this requirement.

REC has equity of Rs 700 crore (Rs 7 billion) and expects to add about Rs 150 crore (Rs 1.50 billion) to this. "Over the years, we have made strategic investments into several power projects and REC expects to leverage the potential of these investments. These investments in power projects include gas-based units of Konaseema and Lanco power," he said.

REC has also committed investment of about Rs 1,500 crore (Rs 15 billion) each in two more coal-based plants in Andhra Pradesh, the 500-MW Vijayawada Thermal Power Station expansion and the proposed 500-MW Bhoopalapally power plant both of AP Genco.

`To surpass target'

Referring to the corporation's plans, Lakhina said, "REC has sanction of Rs 18,000 crore (Rs 180 billion) and has targeted Rs 9,000 crore (Rs 90 billion) in disbursements. We are confident that we will surpass this target and envisage a growth rate of about 30% this year."

The Eleventh Plan envisages capacity addition of about 60,000 MW and for a non-banking financial company such as REC, it provides for immense scope to play a strategic role in helping power utilities in their quest to set up new plants and to meet their expansion plans, he said.

Referring to the ambitious Rajiv Gandhi Grameen Vidyutikaran Yojana, which seeks to electrify the uncovered areas of the country, Lakhina said that the project had initially envisaged an outlay of Rs 16,000 crore (Rs 160 billion). But given the magnitude of the task and the scope of the work, this amount is likely to go up to Rs 20,000 crore (Rs 200 billion) to Rs 22,000 crore (Rs 220 billion).

While complimenting Andhra Pradesh Government for initiating reforms in the power sector and unbundling the utilities, Lakhina said, "There is still a long way to go for several states. Unless they account for the power supplied, it would be difficult to infuse fresh funds for expansion".

REC signed up with four Rural Electric Cooperative Societies, agreeing to provide additional funding. One way to ensure that these rural societies get competitive is to diversify and get into generation through biomass projects. To bring in efficiency, the REC CMD Lakhina suggested franchisee route for management and collection of dues from local consumers.

Monday, October 02, 2006

DLF rebuilds IPO plans; may file prospectus next month

After failing in its earlier attempt to tap the capital market with the largest ever public issue in Indian history, real estate major DLF is likely to file an all new initial public offer prospectus with market regulator Sebi next month, reports agencies.

The company may file its draft red herring prospectus with the Securities and Exchange Board of India by the end of October or early November this year, company sources said.

The real estate developer is still awaiting the report from Ministry of Company Affairs on the issue of minority shareholders, sources said.

The minority shareholder issue was one of the major reason behind the collapse of the much-hyped IPO, which could have made DLF promoter KP Singh India's richest man.

Singh, along with his family and holding companies, owns 98.66% of DLF.

The company had withdrawn its DRHP with the market regulator Sebi late in August this year after failing to get the required clearance from the regulatory authorities.

The IPO was being touted as the country's biggest ever public issue with total proceeds from the sale of shares in the offer being pegged at as high as over Rs 15,000 crore (Rs 150 billion) in the market circles, even ahead of Rs 10,500 crore (Rs 105 billion) raised through a public issue by PSU oil major ONGC in March 2004.

DLF used to be a publicly traded entity until 2003. However, its latest attempt to enter the capital market ran into rough weather after a group of minority shareholders complained of discrepancies in the share of convertible bonds by the company.