Indian IPO

All details about Hot Indian Primary Market.

Thursday, March 29, 2007

Sebi to process Gammon unit IPO papers

Gammon India said the Securities Appellate Tribunal has passed an interim order directing the Securities and Exchange Board of India to process its subsidiary's draft document for an initial public offering, IPO.

The tribunal also admitted the appeal filed by Gammon's subsidiary, Gammon Infrastructure Projects (GIPL), against a Sebi order, which "denied GIPL access to the capital market for a period of one year," it said on Wednesday. On February 6, the stock market regulator had barred Gammon's subsidiary Gammon Infrastructure Projects from proceeding with its initial public offer, for a year.

Last year in December, Sebi had barred Gammon, its chairman Abhijit Rajan and two other entities from any transaction in the shares of Gammon Infrastructure for three years from the date of allotment in its issue.

Sebi was investigating the use of company funds for a rights issue and failure to make certain disclosures, reports The Economic Times.

Thursday, March 22, 2007

SET plans to hit capital market by end of 2007

Nimbus has called a board meeting on March 23 to consider a proposal from Sony Entertainment Television for buying a 26% stake in the cricket channel Neo Sports. SET has been in talks with Nimbus for close to a month now, and the Sony board has approved the deal, using the funds set aside for the abortive bid for Ten Sports.

Meanwhile, Sony Entertainment Television’s (SET) ambitious public listing, is on track, with the mandated investment banks valuing the company at USD 1.7 billion. The firm is planning to hit the capital by the end of 2007 and sell about 10% of its equity.

JM Morgan Stanley, Kotak and UBS, who are the appointed lead managers of the issue, according to sources have been in active discussion with the Sony top management to chart the road map for the timing and value of the issue.

Investment banking sources pointed out that while multinationals do not like to list in India, the listing may be done to ensure the Indian promoter’s and US based private equity fund Capital’s exit.

Capital and the Indian promoters hold close to 32% have been looking at exiting the company for a while now. The IPO will be a mix of fresh issue and offer for sale, Indian promoters will sell stake and Sony will raise money.

SET is now considering launching an Indian music channel for global distribution, prior to the IPO. The company last year had gone through its restructuring process, and had acquired SET Singapore. SET Singapore, is the Singapore based broadcaster, which broadcasts and unlinks the Sony channels.

SET India, on the other hand, is the advertising and sales agent of the Singapore broadcaster. The shareholding pattern of SET India and SET Singapore are identical. While, Sony Pictures International holds 61% in both the above-mentioned companies, the balance is held by local investors and foreign institutions.

The Indian promoters of SET, have been looking at an exit option for a while now. The combined shareholding of the promoters is 32% and Indian promoters include the Singapore-based banker Rakesh Agarwal, Shemaroo Films managing director Raman Maroo, World Media Group Director Sudesh Iyer, MobiApps Holding’s Jayesh Parekh and actor Jackie Shroff, reports The Economic Times.

Writer Corp plans capital market foray within 5 yrs

Writer Corporation is very visible around the city of Mumbai - most people have seen their ochre and light brown vans whizzing around the city. This relocation firm is now being run by a third generation member of the family. Garfield D'Souza is the 31 year old scion who is taking the company forward. This BCom graduate from St. Andrews college has hopes of taking the company into the Middle East and actually becoming a market leader there in the relocations business.

Writer Corporation started 53 years ago with a handful of workers, one truck and ambition to succeed. Today, this company is a market leader in the relocation business and Garfield is at the helm of the firm. He started as a trainee in the company as his father made it clear that the company would not be inherited, it had to be learnt. He gives his father credit for shaping his persona.

Managing Director, Writer Corporation, Garfield D'Souza told CNBC-TV18, "Right from the beginning my father involved me in some way in the business. He would take me to play on the computer or file papers. Then after I graduated, there was no hesitation in diving in and wanting to excel. Right from the start, I was out with the packers - eating with them, packing things with them - and along the way, it built up a real sense of trust and camaraderie with the people as they form the nucleus of the business."

Writer started out by shipping for the army and they used gunny bags and straw to do their packing. But now they provide packing and moving services of the highest standard with a damage ratio that is next to neglible. He says, "As a result of the outsourcing wave that hit India, Writer also got swept by the wave. So, setting out of India with a good deal of knowledge and technology, our people could manage relocations of large multinationals - from Paris to New York - and we would leverage off partnerships we had in those particular regions to manage the projects - so to speak."

Garfield realises that he will have to up the ante and expand beyond Indian shores. And to do that, Writer has created a hub in Dubai because "the traffic between India and the Middle East (primarily Dubai and Bahrain) is extensive. He adds, "I think there is a need for us to spread our wings and focus on the international growth strategy and to de-risk the India model, if for any reason we got hit, it's the international presence that could solidfy the corporation."

He says, "We are going to close FY07 between Rs 200-220 crore of topline revenues and our projections for next year are between Rs 320-340 crore revenues as a combined entity."

"Right now we are putting together building blocks, which means we are putting together strong corporate governance plan. I am sure in the next five years, we will tap the market for debt and some form or the other. But there is definitely a plan to take Writer to the capital market", he adds.

The money raised from capital market by listing the company will be used in expansion. D'Souza further says, "There are several areas; more expansion definitely. Writer has always wanted to grow its businesses but at a certain level make sure that the core of the business is very strong. But yes ofcourse, international business is a great area for us to explore."

So, just what kind of relocation services does Writer provide. Garfield explains, "Let's take the Microsoft account. They have plans for India and therefore it necessates the movement of some high level executives. All of these people come in with some sort of premonitions about India and it's important to se their mind at ease. So, therefore when they arrive,we acclimatise them with the particular city they are going to be based out of, we hand-hold them through the schooling process. We make sure to find them a driver and a maid, get their residential permits done and set up their home for them."

So, basically Writer Corporation lets expats and foreign workers come to India and makes the transition a hassle-free experience for them, so that they can hit the ground running. By also making the process of moving to India so painless for such clients, Writer is building up quite a reputation for itself with the overseas crowd. And such goodwill is what will keep their cash registers flowing.

Jyothy Labs plans IPO of Rs 300cr

Mumbai-based fast moving consumer goods company Jyothy Laboratories plans to tap the capital markets later this year. This will be the first FMCG IPO after a gap of two years. The last FMCG company to go public was the Kolkata-based Emami.

Jyothy Labs, best known for its Ujala brand of liquid fabric whiteners, is said to be planning Rs 300 crore initial public offering, which is expected by the end of 2007. Investment banking sources said that the company had appointed Kotak and Enam as advisors to the issue.

Jyothy Labs is a closely held company with about 70% stake being held by founder chairman and managing director M P Ramachandran and his family. The balance 30% lies with private equity firms CLSA and Actis along with a foreign subsidiary of ICICI Bank. The foreign investors are likely to exit the company at the time of the IPO. Ramachandran was unavailable for comments.

Jyothy Labs sales are pegged at between Rs 400 crore and Rs 500 crore. The company is said to have been valued at around Rs 1,000 crore.

Over the last few years, there have been unconfirmed reports that other FMCG companies like Godrej Consumer and Reckitt Benckiser were keen on either buying out or acquiring a stake in Jyothy Labs. However, the promoters are said to have been unwilling to give up control, preferring to opt for private placement first and now a public offering.

After launching Ujala nationally in 1997, the brand has gone on to become the market leader in the fabric whitener category, snatching share from Reckitt’s Robin Blue. It has over the years entered other product categories like mosquito repellents (Maxo), personal care products (Jeeva), detergents (Speed), cleaners (Exo) and air freshners (Maya). The company also has a significant volume of exports to 14 countries including Sri Lanka, Mauritius, Malaysia and Hong Kong.

CCL Products India, an Andhra Pradesh-based coffee company has set up a joint venture company with Jyothy Labs to launch instant coffee under the ‘Continental Speciale’ brand name.

Locally, the company has a well established distribution network of close to 4,000 distributors across the country. As a result, other FMCG firms have entered into strategic agreements with the company to piggy back on its network. Godrej Beverages and Foods sells its tea brand Godrej Tea through Jyothy’s network, reports Business Standard.

Tuesday, March 20, 2007

Deccan Infrastructure plans to raise Rs 2000cr via IPO

Deccan Infrastructure & Land Holdings (DILH), a subsidiary of Andhra Pradesh Housing Board (APHB), is planning to raise up to Rs 2,000 crore through an IPO, subject to regulatory clearances.

“We are looking to divest 15-20% equity in the company some time in June or July if everything works out well,” S N Mohanty, chairman and housing commissioner, Andhra Pradesh Housing Board, said.

The Government of Andhra Pradesh holds 49% equity and the APHB 51% in DILH which is into the development of integrated townships and urban infrastructure either on its own or through JVs with other public bodies and private-sector companies. The draft red herring prospectus is being whetted by the auditors PriceWaterhouse Cooper and managers to the issue and merchant bankers JM Morgn Stanley, DSP Merrill Lynch and SBI Capital Markets.

Based on the track record of its parent and armed with a land bank of about 8,000 acres that is conservatively valued at over Rs 12,000 crore, Mohanty is expecting the valuation for the premium issue would be quite aggressive.

While property consultants Trammell Crow Meghraj and Cushman Wakefield are carrying out a valuation exercise on the land bank, the APHB’s balance sheet itself should provide the Deccan Infrastructure IPO a premium pricing, says Mohanty.

Over the past three years, the APHB has been instrumental in the construction of 50,000 dwelling units across the state, including houses in the government’s initiative for lower income group, Rajiv Gruha Kalpa Scheme.

The APHB is now taking up a massive exercise to create additional housing for the middle-income groups in the state at rates 25% lower than the market, reports DNA Money.

Thursday, March 15, 2007

SEBI to announce guidelines on share listing price

Securities and Exchange Board of India's guidelines on ceiling of listing prices for debutante shares will be announced "very soon", said M Damodaran, chairman, SEBI.

The move is aimed at preventing prices of debutante stock from rising beyond a certain limit on the listing day when circuit filters are not operational.

Currently, circuit filters on share prices are imposed after the listing day, as it allows price discovery, which sets a reference price for circuit filters.

Although some recent listings have taken place at discount to the issue price, earlier some listings were around 100-150% premium to the issue price, as per NW18.

Circuit Systems plans public offer

The Gandhinagar-based Circuit Systems (India), manufacturer of printed circuit boards (PCBs) for industrial electronic equipment, is increasing its production capacity and coming out with an IPO next month, its managing director, Paresh Vasani, said.

He told reporters that the company's existing installed capacity of 1 lakh sq metres of circuit-making would be increased to 1.7 lakh sq metres at a new premises in the Special Economic Zone for electronics at Gandhinagar. The new facility will begin production at the end of 2007-08. The company will invest Rs 20.71 crore, of which Rs 14.85 crore would be raised through initial public offering. A Belgium customer is investing Rs 1.92 crore while the company would contribute Rs 3.93 crore through internal cash accruals.

The company has already applied to SEBI and its IPO is likely to come out next month, reports The Hindu Business Line.

DLF may get SEBI clearance for IPO next week

A leading real estate developer based in New Delhi, DLF, which is planning to raise around Rs 10,000 crore from the primary market, may get SEBI clearance for IPO next week.

DLF will seek investor feedback on pricing of issue next week. It filed its DRHP on January 7, 2007 with Sebi.

Tuesday, March 13, 2007

Realty firms' IPOs under Sebi scanner

Market regulator Sebi seems to be concerned about the spate of real-estate company IPOs on the market, reports CNBC-TV18.

Sebi seems to be worried about property public issues. Sources say it has stalled several IPOs from real estate firms apparently because it is concerned by the number of such companies floating issues. Sources say Sebi questioned many companies regarding the valuation of development rights and the their land banks. Sebi is also learned to be scrutinising their financials.

Some of the delayed issues are from companies such as DLF, HDIL, Orbit and IVR Prime, a subsidiary of IVRCL Infrastructure.

The Reserve Bank also attempted to cool the real-estate market by increasing the risk weightage for developer loans last year.To top it all, rising home loan rates have slowed disbursals in the past few months and property companies are feeling the pinch. Most real estate counters have been hit in the past few months and many new listings are trading below their issue prices.

That's probably why SEBI seems to be advocating caution and is in no hurry to clear dozens of IPO applications pending before it.

ICRA IPO price band Rs 275-330

Indian credit rating firm ICRA Ltd has set a price band of 275-330 rupees a share for an initial public offering of shares that values the company at up to 3.3 billion rupees ($74 million), a banking source said on Monday.
"About 26 per cent of ICRA is being sold by current shareholders, and significant portion of it would be from IFCI," the banker said.
IFCI Ltd, a state-run term lender, would be selling around 1.86 million shares, the source said.
Current shareholders, including State Bank of India are set to sell about 2.58 million shares in total in the IPO expected later this month, the source said.
Global rating agency Moody's Investors Service, a current shareholder, was likely to hold a stake of about 28 per cent in ICRA after the IPO from 29.1 per cent now, the source said.
Kotak Mahindra Capital Co and SBI Capital Markets Ltd are the managers for the issue, the source said.

Sunday, March 11, 2007

Zylog Systems plans IPO; embarks on Rs 66.7cr expansion

Chennai-based Global IT services provider and a 100% EOU Zylog Systems, ZSL has embarked on an expansion drive by setting up of two state-of-the art Offshore Development Centres. It also plans acquisitions and strategic investments.

ZSL services includes IT outsourcing services, application services, managed services, business intelligence and data warehousing, mobile computing services, QA and testing services and BPO services.

ZSL's customer base is spread across a wide spectrum and they include names like Barclays, Field Power, Metlife, Volt Telecom, Lehman Brothers and JP Morgan Chase.

Zylog intends to invest Rs 66.71 crore to set up two Offshore Development Centres (ODCs) at Sholinganallur and Siruseri to enable it to increase its offshore business.

The company also plans to spend on acquisitions, which are a strategic fit and in line with its future goals. This will help Zylog deepen its domain expertise, expand service lines, obtain access to new markets / verticals and enhance its technology footprint. These acquisitions will also result in several benefits for Zylog, namely, positive contribution to revenue and profitability, expansion in clientele, cross selling opportunities and increase in offshore business.

To part finance its expansion plans, the company soon proposes to enter the capital market with a public issue of 36,00,000 equity shares of Rs 10 each through the book building route. The company has filed the draft red herring prospectus (DRHP) with Sebi. Motilal Oswal Investment Advisors is the book running lead manager, while Karvy Computershare is the registrar.

Zylog Systems focuses on providing technology services in line with client specific requirements. These services are performed onsite/offsite/offshore or in combination depending upon the clients' requirement, nature of engagement and the nature of the project. An ISO 9001:2000 company, Zylog continuously leverages cutting edge tools, methodologies and benchmark standards to exceed the expectations of its customers.

The company earns almost a third of its revenue through partnerships with systems integrators/solution providers and value added resellers (VARs). This unique business model over a period of years has resulted in specialization and focus on industry verticals such as Telecom, BFS and Retail which are prominent contributors to the business.

Monday, March 05, 2007

To look at IPO for ICICI Holdings within this yr: ICICI Bk

Source : Moneycontrol.com

ICICI Bank's board has decided to transfer its holdings in its insurance and mutual fund companies to a newly created wholly owned subsidiary called ICICI Holdings. The bank holds 74% stake in the insurance companies and 51% stake in the AMC and trust company.

Joint Managing Director of ICICI Bank, Kalpana Morparia informs that their current market share stands at 10% in an overall basis, while it is at 30% in the private space. She sees the value of ICICI Holdings close to USD 7 billion. Morparia further adds that they are looking at an IPO for ICICI Holdings within the current year.

Excerpts from CNBC - TV18’s interview with Kalpana Morparia:



Q: The first question interesting ICICI Bank investors would be, now that this residual value which was so far captured in the ICICI Bank shares is going to go out to the other company, when can they see it unlocked in the form of an IPO or a share which they can see value in or trade value in?



A: As we said in the press release, we are looking to IPO this company to meet the capital requirements of both life insurance and general insurance. Over the next couple of months we will be incorporating the new company, subject of course, to all approvals, which is primarily Reserve Bank of India and IIDA and just get stock on the total capital requirements of these two companies and plan an IPO.



Q: How long do you think this entire process might take?



A: I would say that whilst we attempt to do it in about a six month period, I would give ourselves time of 6-9 months to do it; certainly we hope to do it in the current calendar year.



Q: What kind of capital requirements do you think you would have for this company?



A: We are in the process just now of ascertaining, as you know both life insurance and general insurance have exhibited very strong growth numbers both on a system wise basis as also individually. Both the companies have grown close to 100% in the nine months period, we are in the process of working out a three year plan and once we get a handle on the overall capital requirements, we will make an announcement.



Q: Specifically on the life insurance side of the business, how much do you see that growing by and what kind of market share are you aiming at?



A: Currently, our market share is just under 10% overall, close to 30% amongst the private players. The industry this year has shown phenomenal growth, it has grown upwards of 100%, we have grown around that number as well and we would expect strong growth momentum maybe not a repeat of the 100% this year but certainly 40 plus kind of growth overall for the industry.



We will grow of course much faster than that. General insurance, again this year, has grown by about 25% and with de-tariffisation we see actually a further impetus overall to growth in this industry, a whole lot of new product innovation is coming in there. Health is an important product for both these companies and therefore we expect strong growth really in this segment as such.



Q: I know it is early stages but you must have done some exercise on what the valuation of these two businesses could be?



A: A number of analysts have put a valuation range to this company, as you know ICICI bank stock is a very well researched stock. There have been valuation ranges from USD 4.5 billion to USD 7 billion in respect of the subsidiary, we will have to wait and watch what the market is priced for it.



Q: Which end do you agree to more as a management?



A: We will have to look at certain other proxies, as you know, in India we don’t have any insurance company that is listed but China lies listed sometimes ago at a very high multiple of 60 multiple to NBAP so even if we factor in whatever discount, it is still a pretty significant number and if we were to look at these kind of proxies you would be closer to the upper end of the range that the analysts have put to it. But the final result is going to come on what the market benchmark would show.

Friday, March 02, 2007

General insurers seek banks' help for IPOs

Public sector non-life insurers have sought the help of their banking counterparts for launching their initial public offerings, IPOs during the next financial year.

According to sources, banks' help is required for valuation purposes. Two weeks ago, the Group of Ministers had indicated that the Government was willing to dilute stakes in the PSU insurers to 74% without any divestment.

Currently, the Government holds the entire paid-up equity capital amounting to Rs 450 crore in the four non-life insurance companies, after General Insurance Corporation transferred its holdings in 2004.

The reason for seeking help is also largely on account of the underwriting losses suffered by the insurers, almost entirely contributed by motor third party liability covers and the wafer thin insurance margins.

Banks had faced a similar situation when they made their IPOs. They were weighed down by non-performing assets as high as eight per cent and low interest margins.

The underwriting losses combined with shrinking returns on investments are now beginning to exert solvency pressures on the insurance companies. In the case of National Insurance Company, the solvency margin is at 1.1, well below the IRDA mandated 1.5.

The remaining three PSU insurers were able to meet the solvency norms through sale of equity holdings taking advantage of the high prices. Moreover, the Finance Minister had also suggested that insurers should also start trading more aggressively in their holdings of Government security holdings. Insurers are reluctant to do so. They hold several high coupon securities in their investment portfolios. Coupon flows on these securities have helped their liquidity, the sources said.

Infusing equity

Consequently the alternative now before the insurers is to infuse equity funds. But the Chairman of the General Insurers' Public Sector Association and CMD of Oriental Insurance Company, M Ramadoss, said, "The Government is not ready to pump in more equity into the insurance companies and have asked us to look at alternatives.

We are now awaiting clearance of the enabling provision in the Insurance Act for raising equity funds."

Therefore, an entry into the markets appears imminent, to sustain the growth momentum.

The sources said equity placements would be made during the next financial year. Pricing has not yet been decided. New India Insurance is likely to command a premium in excess of Rs 200 a share and Oriental Insurance close to Rs 100, reports The Hindu Business Line.

Oil India public issue likely by October

Oil India, OIL hopes to tap the capital market by October. OIL, director (Finance), T K Ananth Kumar, said the company has proposed a 10% float to the Government and hoped to get the mandatory approvals by March-April this year.

"We hope to get approval by March-April and six months from then we hope to come out with an IPO," he said.

The company expects to mop up at least Rs 1,500 crore through the IPO, he told newspersons on the sidelines of a conference organised by Petrofed to discuss the implications of the Budget on the oil and gas industry. Government currently owns about 98% equity stake in the unlisted OIL. The proceeds from the IPO would be used for the company's exploration and production activities for the next five years.

Acquisition plans

OIL is also looking at the acquisition of small to medium-sized exploration and production companies overseas. "We are keen on expanding our overseas portfolio. We are scouting for opportunities with our partner Indian Oil Corporation," he said.

OIL and Indian Oil are looking to acquire producing oil assets in Africa, West Asia, Asia and South America, Ananth Kumar said.

He also said that the company planned to invest Rs 15,000 crore in the next five years in its core competence of oil and gas exploration and production and another Rs 2,000 crore in its downstream forays into refining. ``We are scheduled to hold discussions with Hindustan Petroleum Corporation (HPCL) this month on possible participation of OIL in their Bhatinda or Visakhapatnam refinery," he said, reports The Hindu Business Line.

Oil India public issue likely by October

Oil India, OIL hopes to tap the capital market by October. OIL, director (Finance), T K Ananth Kumar, said the company has proposed a 10% float to the Government and hoped to get the mandatory approvals by March-April this year.

"We hope to get approval by March-April and six months from then we hope to come out with an IPO," he said.

The company expects to mop up at least Rs 1,500 crore through the IPO, he told newspersons on the sidelines of a conference organised by Petrofed to discuss the implications of the Budget on the oil and gas industry. Government currently owns about 98% equity stake in the unlisted OIL. The proceeds from the IPO would be used for the company's exploration and production activities for the next five years.

Acquisition plans

OIL is also looking at the acquisition of small to medium-sized exploration and production companies overseas. "We are keen on expanding our overseas portfolio. We are scouting for opportunities with our partner Indian Oil Corporation," he said.

OIL and Indian Oil are looking to acquire producing oil assets in Africa, West Asia, Asia and South America, Ananth Kumar said.

He also said that the company planned to invest Rs 15,000 crore in the next five years in its core competence of oil and gas exploration and production and another Rs 2,000 crore in its downstream forays into refining. ``We are scheduled to hold discussions with Hindustan Petroleum Corporation (HPCL) this month on possible participation of OIL in their Bhatinda or Visakhapatnam refinery," he said, reports The Hindu Business Line.

Thursday, March 01, 2007

Glory Polyfilms fixes issue price band at Rs 45-52

Glory Polyfilms, an established profit making company in the packaging industry for the last 8 years, received Sebi nod to enter the capital market with an IPO of 82, 20,000 equity shares of Rs 10 each.

The price band is Rs 45 per equity share at the lower end and Rs 52 per equity share at the higher end. The issue would constitute 47.06% of the fully diluted post issue paid-up capital of the company.

Glory Polyfilms is engaged in the manufacture of co-extruded multi-layer barrier film and printed/unprinted flexible laminates. Co-extruded film has multiple/ diverse applications as a packaging material for food, liquids like milk, edible oil & non-food items. The company has a strong and well-known customer base from diversified industries, which has been developed over a period of time.

One of the key objects of the issue is to part finance the expansion of company's Multi-layer film producing capacity by 11652 MTPA, printing capacity by 4956 MTPA and lamination capacity by 3500 MTPA. This expansion of its existing facility at Daman would cost Rs 3900 lakh. The project is appraised and part financed by Indian Overseas Bank.

Glory Polyfilms’ IPO is lead managed by SREI Capital Markets. The equity shares of the company will be listed on the Bombay Stock Exchange and National Stock Exchange, as per press release.