Indian IPO

All details about Hot Indian Primary Market.

Thursday, November 30, 2006

International Tractors plans IPO

International Tractors, ITL, a manufacturer of the Sonalika brand of tractors, is mulling an initial public offering, IPO issue in March 2007, reports The Hindu Business Line.

ITL is currently in talks to offload 10% stake to a private equity firm. Post the completion of the transaction it would commence the necessary formalities for an IPO, according to L D Mittal, chairman, Sonalika Group.

The Rs 10 billion tractor firm already has strategic investments by three firms, including two private equity firms, which collectively hold 32% in ITL. This includes a 10% stake each by Citigroup and 3i, while Japanese tractor maker Yanmar has about 12% stake in the company.

Under the agreement with Yanmar, ITL will manufacture components and 30 - 40 HP tractors initially for Yanmar and export them to Yanmar`s operations in Eastern Europe, US and Canada, apart from selling them in India. The company will also make use of Yanmar`s global distribution network to sell the Sonalika range of tractors.

The IPO would help the company to raise funds for a new plant as well as its international operations. ITL had recently evinced an interest in purchasing a tractor unit in Eastern Europe.

It also plans to set up an assembly unit in Africa. This will help boost exports to the region as well as reduce the logistical costs.

ITL plans to ink a marketing tie-up with Tata International for the same and will take advantage of the latter`s distribution/service network in the region.

International Tractors plans IPO

International Tractors, ITL, a manufacturer of the Sonalika brand of tractors, is mulling an initial public offering, IPO issue in March 2007, reports The Hindu Business Line.

ITL is currently in talks to offload 10% stake to a private equity firm. Post the completion of the transaction it would commence the necessary formalities for an IPO, according to L D Mittal, chairman, Sonalika Group.

The Rs 10 billion tractor firm already has strategic investments by three firms, including two private equity firms, which collectively hold 32% in ITL. This includes a 10% stake each by Citigroup and 3i, while Japanese tractor maker Yanmar has about 12% stake in the company.

Under the agreement with Yanmar, ITL will manufacture components and 30 - 40 HP tractors initially for Yanmar and export them to Yanmar`s operations in Eastern Europe, US and Canada, apart from selling them in India. The company will also make use of Yanmar`s global distribution network to sell the Sonalika range of tractors.

The IPO would help the company to raise funds for a new plant as well as its international operations. ITL had recently evinced an interest in purchasing a tractor unit in Eastern Europe.

It also plans to set up an assembly unit in Africa. This will help boost exports to the region as well as reduce the logistical costs.

ITL plans to ink a marketing tie-up with Tata International for the same and will take advantage of the latter`s distribution/service network in the region.

Saturday, November 25, 2006

Reliance Cap eyes 10-20% in Gati

Reliance Capital is believed to be in talks to acquire a minority 10-20% stake in logistics solutions company Gati Ltd.

In February this year, Reliance Capital acquired a 44% stake in logistics firm DTDC Courier and Cargo Ltd for Rs 65 crore. The company was also involved in the race to acquire Patel Roadways but the deal failed to materialise according to media reports.

“The stake could be somewhere in the range of 10-20%,” sources told FE. Although the size of the deal is not known, a dilution of 20%, according to the market capitalisation of the company as on date, could fetch the company somewhere in the range of Rs 130 crore.

However, when contacted, GATI, in a e-mailed answer said, “We have already planned to dilute 15% to Singapore-based private equity investor TIFOI and FCCB holder, any further minority dilution may be done at a later date as now there is no need of funds as on date and we will not dilute any further equity.” ADA officials declined to comment.

The promoters currently hold 53% stake in the company. A 20% dilution would reduce the promoter holding to 33%.

Gati had recently announced plans to invest $100 million over the next three years to expand its operations in India as well as outside the country.

“The company has already tied-up funds worth $100 million through rights issue, Foreign Currency Convertible Bonds (FCCBs), warrants, shares to TIFOI and internal accruals, company officials said.

Wednesday, November 22, 2006

BEML equity offer likely in March 2007

Bharat Earth Movers, BEML, the public sector engineering outfit is hoping to come out with a public offer in March 2007, reports Business Standard.

The company would raise Rs 400 crore through the issue to fund its proposed capital expenditure.

A part of this proceeds would be invested into a contract mining joint venture of BEML with an Indonesian outfit.

The chairman and managing director of BEML, V RS Natarajan, said that the company is expecting to get the cabinet nod in this regard within a month. "Cabinet would take up the issue in November. We are expecting go ahead signal in a month," he said.

He was in Kolkata on Wednesday for the India Mining Summit, to be organised by CII.

According to him, the number of shares to be issued would be 49 lakh following the good performance of the BEML scrip at the bourses.

BEML is now being traded at Rs 1,000-1,100. It has touched a 52-week high of Rs 1785 in March this year.

He informed that the entire proceeds of the public offering would be invested in capital expenditure projects. A major portion of the public issue proceeds would be invested in coach manufacturing facilities for underground railway systems at its unit near Bangalore.

Besides, it would invest around Rs 50 crore in a joint venture for contract mining.

"The contract mining outfit will be a threeway joint venture between BEML, an Indian company and an Indonesian outfit. We are likely to have 50% stake and our partners will have 25% each," he added.

According to Natarajan, BEML would invest close to Rs 250 crore in metro coach manufacturing facility.

The Union government held close to 61% in BEML at present. After the public issue, the central government's shareholding was likely to come down to 55%.

Commenting on its joint venture, JV in Brazil, the BEML CMD said that the JV would start production from the second quarter of 2007. BEML had set up the JV in Brazil with CCC (Compagnie Comercio E Construcoes) for manufacture and supply of rail wagons and bogies, along with mining and construction equipment, and spares.

Tuesday, November 21, 2006

Unitech, Ansal plan to raise $1 bn via FPOs

Unitech and Ansal Properties are believed to be mulling plans to raise further capital from the international markets or through follow-on public offerings, FPOs, reports Business Standard.

Investment bankers close to the developments said the two companies could collectively garner over USD 1 billion (Rs 4,500 crore) from the domestic or international markets - which would take the combined total proceeds for the sector to Rs 22,500 crore (over USD 5 billion).

This comes on the heels of Parsvnath Developers' public issue that generated demand for over Rs 60,000 crore worth shares.

The presence of the Indian property sector on Dalal Street has been negligible so far with a handful of listed realty firms accounting for less than 1% of the country's overall stock market capitalisation.

However, it could soon change with more than a dozen companies finalising their plans to hit the capital market soon.

Of these, at least five companies are likely to hit the market with their IPOs on the domestic or international stock exchanges before the end of this fiscal year, which could generate a collective amount of Rs 18,000 crore (over USD 4 billion).

Cholayil likely to raise funds in two years

Personal care products company Cholayil is likely to go in for external funding within two years, reports Business Standard.

Managing Director V S Pradeep said, “At present, we do not have external funding. We are open to other avenues of fund raising as we go along.” The company has not ruled out a private placement or a public issue.

The Rs 750 crore company, which has brands such as Cuticura and Medimix, has been pushing its brands aggressively over the past months and expects the brands to grow rapidly over the next few years.

Pradeep said while the expansion would require additional funding soon, it was too early to comment on how much the company would be looking to raising. Over the next fiscal, the company would be merging its group company Dorcas Market Makers, DMM. Pradeep said the company had initially set up DMM as a separate marketing arm, for group brands as well as other brands.

“The rationale for setting up a separate entity earlier was that we were looking at distribution operations for other manufacturers in South India where we have strong distribution advantages,” he said.

In 2002, the company was distributing Sunfill, the soft drink concentrate from Coca Cola. But, its plans to turn into a full-fledged distributor didn’t take off and DMM ended up marketing only the group brands, hence, the decision to merge the company with itself.

Cholayil is also finalising plans to enter the men’s grooming segment. Hair care is another area the company is looking at.

Recently, Cholayil had launched the Cuticura deodorant and has further extensions lined up under the brand. Similarly, it is looking at widening its portfolio of ayurvedic products under the Medimix brand.

Thursday, November 16, 2006

United Bank may put IPO on hold

United Bank of India, UBI may choose to put its proposed initial public offer, IPO on the backburner if its present equity capital is not comfortably restructured. The government has asked the bank to “revisit” the plan to converting Rs 1,200 crore into preference capital to keep it in line with the Reserve Bank of India’s proposed guidelines in this regard, reports DNA.

PK Gupta, chairman and managing director, UBI, said: “The finance ministry has sought our views on this and we are re-examining the issue at present. We are already adequately capitalised for the next four to five years”.

UBI had approached the ministry to allow this reduction in equity and conversion of this amount into preference shares.

While conversion into preference shares was the preferred choice, a second option was to ask the government to invest up to Rs 295 crore in innovative perpetual debt instruments and convert the rest into preference capital.

All these proposals from the bank were geared to make its ratios such as the earning per share, PE ratio more attractive for its capital market plans. UBI’s present equity capital restricts it from getting an attractive pricing once it decides to hit the market with its IPO, which it was planning some time next year.

With the RBI considering placing a cap of 40% of equity capital for issue of preference capital, UBI’s case for conversion does not quite conform to this. The amount put forward for conversion happens to be over 75% of the Tier 1 capital.

While the bank may choose to bring the amount down to 40%, banking sources indicated that the purpose of conversion might not hold good for UBI. The bank’s capital adequacy ratio is slightly above 12% at present and it has recently raised Rs 200 crore of Tier 2 capital. UBI aims to grow its business by 21% to Rs 54,000 crore from Rs 46,304 crore at present.

The bank had targeted a 27% growth in credit, of which it has achieved about 16% in the half year.

Spruce-up

United Bank wants to reduce its equity so that its earnings per share and PE ratio become more attractive for its capital market plans

Its present equity capital restricts it from getting an attractive pricing once it decides to hit the market with its IPO

The bank was planning to launch its IPO some time next year.

Tuesday, November 14, 2006

DLF to file fresh draft prospectus by Dec-end

India’s largest real estate developer DLF will file fresh draft prospectus by December end, according to sources. The allotment of debentures will be done to DLF minority shareholders by December.

The Delhi-based company will hold its extra-ordinary general meeting, EGM today to sort minority shareholders' issue.

Debenture holders will get 400 shares of Rs 2 face value for each debenture. But there is no commitment to minority holders for right in IPO.

The company has formed committee to solve issues and it must give solution by December end.

Sobha Developers fixes IPO price band at Rs 550-640

The Bangalore-based Sobha Developers, SDL is coming out with a public issue of 88,93,332 equity shares of Rs 10 each through book building process in the price band of Rs 550 - 640 per share, reports The Hindu Business Line.

The issue comprises a reservation of upto 8,89,300 equity shares for SDL's permanent employees and a net issue to the public of 80,04,032 equity shares. It constitutes 12.20% of the post-issue paid-up capital of the company.

The issue opens for subscription on November 23 and closes on November 29.

Out of the net issue, at least 60% would be allocated on a proportionate basis to FIIs and domestic qualified institutional buyers.

About 10% of the total issue will be available for allocation on a proportionate basis to non-institutional bidders and 30% will be available for allocation on a proportionate basis to retail individual bidders.

"We have developed and constructed 21 residential projects in Bangalore covering approximately 2.98 million sq ft, 75 contractual projects in eight Indian States covering about 8.42 million sq ft and two commercial projects aggregating 0.11 million sq ft.

SDL has land reserves measuring to about 2,747 acres in Bangalore, Mysore, Pune, Chennai, Kochi, Thrissur and Coimbatore,'' said PNC Menon, chairman, SDL, at a press conference called to announce the offering.

The company proposes to utilise the net proceeds of the issue to finance land acquisition and fund ongoing projects. A part of proceeds would be used to repay certain loans.

Kotak Investment Banking, Enam Financial Consultants and IL&FS Investsmart are the book running lead managers.

Raj TV Network plans to raise Rs 1 bn through IPO

Raj Television Network plans to raise Rs 1 billion through its initial public offering, IPO. The issue proceeds will be used for launching a niche youth channel, producing telefilms, distribution of TV channels in overseas markets, creating a studio facility, strengthening existing content, and exporting films, reports Indiantelevision.com.

Post-IPO, the promoters' holding will drop from 100% to 72.5%. The IPO will consist of a fresh issue of 22,70,700 shares (15%) and an offer for sale of 12,97,550 shares (10%). Raj TV Network is also reserving 2.5% as ESOPs.

"We expect to raise Rs 1 billion. The final value will, however, be determined through the book building process," Raj TV Network senior vice president, corporate planning and strategy Sathya Prakash said.

The company has earmarked Rs 106 million for launching a niche channel aimed at the youth while Rs 71.5 million will be for the studio and Rs 62.5 million towards telefilms. For beefing up content, Raj TV plans to spend Rs 90 million, Rs 50 million for export of films and Rs 37.5 million for distribution of TV channels in overseas markets.

"We plan to produce five telefilms a year which could also be released on multiplexes. We will be launching our channels internationally. These channels will have a component of local content in each of the markets," says Prakash.

Raj Television Network has already filed the draft red herring prospectus with the Securities and Exchange Board of India, Sebi to enter the capital market with an offer of 35,68,250 equity shares of face value of Rs 10 each. The book running lead manager to the issue is Vivro Financial Services.

The company, which operates Tamil channels Raj TV and Raj Digital Plus, posted a revenue of Rs 320 million during 2005-06 fiscal and Rs 92 million for the first quarter ended 30 June 2006. Pay-TV revenue accounts for 30-35 per cent of the company's total earnings, says Prakash.

Wednesday, November 08, 2006

Sobha IPO to raise Rs 488-570cr

The Bangalore-based Sobha Developers, SDL, amongst the country’s biggest landholders, is looking to raise between Rs 488 crore (Rs 4.88 billion) and Rs 570 crore (Rs 5.7 billion) as it gears up for a mega IPO, reports The Economic Times.

SDL proposes to issue 88.9 lakh equity shares of Rs 10 each at a price band of Rs 550-640 per share through the 100% book-building process.

The issue will comprise 12.2% of the company’s fully diluted equity base. The IPO is scheduled to open between November 23 and 29, 2006.

The IPO proceeds will be used to finance land acquisitions, construction and development of existing and proposed residential projects and for retiring certain loans.

SDL has land reserves of about 2,747 acres in Bangalore, Mysore, Pune, Chennai, Cochin, Thrissur and Coimbatore. Having established its core competency in the IT arena through projects for Infosys, Sobha is also exploring the opportunity of setting up an IT SEZ in Chennai.

Last month, Sobha completed a pre-IPO placement of 4.8 lakh shares with Kotak Mahindra Private Equity Trustee and 97,245 shares with Bennett, Coleman & Company Ltd.

Kotak Mahindra Capital and Enam Financial Consultants are the book running lead managers to the IPO and ICICI Securities is the co-book running lead manager.

PNC Menon-promoted Sobha’s total revenues and PAT were Rs 628.43 crore (Rs 6.28 billion) and Rs 89.23 crore (Rs 892.3 million), respectively in FY06. For the first six months of the current fiscal, the company had consolidated revenues of Rs 532.84 crore (Rs 5.32 billion) and Rs 53.97 crore (Rs 539.7 million) of net profit.

Binani revives stake sale plan in cement arm

Binani Industries has revived its plan to float 10.9% equity of its cement arm Binani Cement through a public issue, reports The Hindu Business Line.

On Tuesday, the company said it had withdrawn the draft prospectus filed with Sebi in February for sale of 10.9% in the cement arm.

Instead, the prospectus will be re-filed, with JP Morgan Special Situations (Mauritius), to dilute part of its 25% equity stake in Binani Cement, bought from Binani Industries in September for Rs 250 crore (Rs 49.2 per share).

Binani Industries had earlier made a private placement of 10.09% of the paid-up capital of BCL to Ganesha Prime Holdings (Mauritius), a subsidiary of Credit Suisse Private Equity Partners Asia LP, at a price of Rs 73 per share.

Wednesday, November 01, 2006

Orient readies IPO plans

Orient Craft, one of India’s largest garment and apparel exporters, plans to raise between Rs 250-350 crore from the capital markets in the first half of 2007, to fund its proposed expansion drive, reports Business Standard.

The expansion, which is to begin in the third quarter of 2006-07, would hike the company’s capacity from 150,000 garments per day to 250,000 garments per day by 2008.

“All our future expansion will come in special economic zones as that is the only way to ensure that exports remain tax free and competitive.

Our new facilities will be coming up in the new SEZ that we are building,” said, Sudhir Dhingra, chairman and managing director, Orient Craft.

The company is investing Rs 500 crore in constructing the first phase of a textile special economic zone that is expected to come up in Gurgaon.

It received the government’s approval for these three months back and the notification for the first phase came through last week.

“In the first phase we will invest Rs 500 crore and in the next two phases, we will invite co-developers. We are in talks with parties in India and abroad as the total cost of the SEZ will work out to Rs 2000 crore,” said Dhingra.

He added that the funds would be raised through a combination of internal accruals and borrowings.

While the size of the SEZ in the first phase will be 460 acres, the total spread in the final phase will be over 750 acres. Orient Craft plans to begin construction by January 2007 and expects the SEZ to be fully operational three years later and have the capacity to employ 30,000 workers.

Devyani International plans IPO for expansion

The Rs 400 crore food and beverage retail franchisee major, Devyani International, which runs KFC, Pizza Hut and Costa Coffee chain of restaurants in India, is contemplating to hit the capital market next year, reports The Economic Times.

"We are planning to hit the capital market next year to raise resources for massive expansion in the retail sector. We will make Devyani International public, not our brand RJ Corp," said Devyani International chairman Ravi Kant Jaipuria.

The process of consolidation of group companies was on before hitting the market, Jaipuria said.

The Jaipuria have diversified interest in real estate, food and beverage retailing and education.

The group had drawn up plans for major domestic and international forays. Real estate projects have been drawn for Colombo and Kathmandu.

He, however, did not disclose details of the proposed public offer and the amount to be raised.

Jaipuria said that the group has also tied up with Walt Disney Co to develop a chain of stores that would sell a new line of Disney branded products.

US-based Yum Restaurants, owner of the KFC, Pizza Hut brands, aimed to add new 60 to 70 KFC restaurants in India by next year.

The Jaipurias may also tie-up with US based Kazi group, the largest KFC resturants owner in US, to jointly expand the KFC brand in India.