Indian IPO

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Thursday, April 29, 2010

Reliance Capital PE’s first deal is in education

In its first investment, the private equity (PE) arm of Anil Ambani-controlled Reliance Capital Ltd has purchased a stake worth Rs100 crore in Pathways World School, a group of schools for students from kindergarten to Class XII. The size of the stake acquired by Reliance Equity Advisors (India) Ltd hasn’t been disclosed.

Reliance Equity Advisors is seeking to tap annual growth in the education sector that its chief executive officer Ramesh Venkat estimates at 50-60%.

A recent report by education-focused PE fund Kaizen Management Advisors Pvt. Ltd has estimated that the so-called K-12 segment (kindergarten to Class XII) is a $20 billion (around Rs89,000 crore) business.

“Also, there are a lot of government initiatives and policy changes which are attracting investment in the sector,” Venkat said.

The ministry of human resource development under Kapil Sibal is aggressively pushing reforms in the education sector while parents are increasingly seeking to put their children in private institutions regardless of the high fees they charge.

Pathways, which offers the International Baccalaureate curriculum, will use this money to expand its present capacity and set up two more schools in the national capital region (NCR) centred on New Delhi, said Prashant Jain, promoter-director of Pathways, which is also looking to diversify into higher education and is working on a university model.

“The plans are still being drawn and the land for this has already been purchased,” said Jain.

The cash raised from the stake sale will fund Pathways’ expansion plan, for which the company has been seeking to raise a total Rs350 crore. It plans to raise the remaining Rs250 crore through debt funding.

Long-term plans include expanding into other parts of India and venturing abroad as well as making acquisitions. According to its website, it runs one school in the NCR and is building two more.

Venkat said Reliance Equity Advisors wanted to invest in an institution that was “reasonably diverse” with interests in schools and higher education.

“In Pathways, their existing expansion plans for the next two-three years has scale of a different order,” he said.

According to the report published by Kaizen Management in January, the K-12 segment consists of approximately one million schools. Of an estimated 343 million children who qualify for the K-12 segment, only 219 million are enrolled.

The K-12 segment is characterized by high upfront capital investment but relatively low operating expenses. Successful schools catering to the segment have significant pricing power, says the report.

“There are approximately one million schools in India, of which 900,000-plus are government-run and have poor quality infrastructure. So this space needs private investment,” said K.K. Iyer, partner and managing director of India Equity Partners, which invested Rs172 crore in IL&FS Education and Technology Services Ltd.

Some of the recent investments in the education space include Rs200 crore by Premji Invest—the investment venture of information technology company Wipro Ltd‘s chairman Azim Premji—in Manipal Education, Rs60 crore in Resonance Eduventures and Rs25 crore in IMS Learning Resources Pvt. Ltd by Milestone Religare Investment Advisors Pvt. Ltd and Rs100 crore in FIITJEE by Matrix Partners India.

Friday, April 23, 2010

Shriram EPC unit files IPO papers

Shriram EPC said on Wednesday its associate firm, Orient Green Power, has filed for regulatory approval for an initial public offering of shares.

Shriram EPC owns 35.8% in Orient Green Power, which producers electricity from renewable sources, it said in a statement to the stock exchange.

JM Financial, Goldman Sachs and UBS Securities are the managers to the issue, it added.

RBI approves Punjab & Sind Bank's IPO plan

The Reserve Bank of India has approved initial public offering (IPO) plan of Punjab and Sind Bank, reports CNBC-TV18 quoting government source.

CNBC-TV18 also learnt that Finance Ministry will approve Punjab & Sind's IPO plan in the next 15 days and this IPO is likely to hit markets by June-July 2010.

The bank aims to raise Rs 500 crore via IPO.

On April 21, the Finance Ministry said all banks needed RBI okay for IPO.

Jaypee Infratech IPO to open on Apr 29

Jaypee Infratech, a part of Jaypee Group, is entering capital market with a public issue on April 29, 2010, reports CNBC-TV18.

Infrastructure development company has fixed the price band for issue at Rs 102-117 a share and the issue will close on May 4. Retail investors will get shares at 5% discount to issue price.

The company is engaged in the development of the Yamuna Expressway, which is a 165-kilometre access-controlled six-lane concrete pavement expressway along the Yamuna river, with the potential to be widened to an eight-lane expressway, and related real estate projects.

Jaypee Group incorporated this company on April 5, 2007 as a special purpose company to implement the concession. This concession also included the right to develop 25 million square metres (approximately 6,175 acres) of land along the Yamuna Expressway at five locations for residential, commercial, amusement, industrial and institutional purposes.

The issue consists of fresh issue aggregating up to Rs 1650 crore and an offer for sale of 6 crore equity shares by Jaiprakash Associates (JAL). JAL owns 99.1% of equity shares of company.

Proceeds raised from the fresh issue will be partially used for financing the Yamuna Expressway Project while money from offer for sale will be received by JAL.

The book running lead managers to the issue are Morgan Stanley India Company Private Limited, DSP Merrill Lynch Limited, Axis Bank Limited, Enam Securities Private Limited, ICICI Securities Limited, IDFC – SSKI Limited, JM Financial Consultants Private Limited, Kotak Mahindra Capital Company Limited and SBI Capital Markets Limited. Karvy Computershare Private Limited is the registrar.

Saturday, April 10, 2010

Kurl-on likely to hit the bourse in 8-12 months

Mattress maker Kurl-on has said it is likely to hit the capital market in next 8-12 months as a part of its expansion plans.

Besides branching into home décor retailing, the company also plans to partner with various home retailers to expand its shop-in shop concept.

“The sentiment in the market is good. We are planning to go ahead with our listing process in the next 8-12 months,” T Sudhakar Pai, Chairman and Managing Director Kurl-on, told Business Line. Earlier, the four-decade-old company had shelved its plans to go public last year following the economic downturn.

This year, Kurl-on commenced operations of its Rs 14 crore manufacturing facility for mattress and pillows. “We have developed a range of products to cater to a large consumer base. Now, we have mattresses ranging from mere Rs 1,700 to Rs 1 lakh on the upper bracket,” he said.

Kurl-on has a high brand recall and enjoys over 50% market share in the mattress category. The company also enjoys a high institutional sale by catering to one and two-star hotels.

“By developing low priced mattress for the market, we have managed to weed out competition from the fakes in the unorganised category. Out of 100 mattresses sold as Kurl-on, 70 are fake,” Mr Pai said.

Retail strategy

Kurl-on had posted a turnover of Rs 415 crore for the fiscal year ended March 31, 2010.

Speaking on the retail strategy, Pai said the company has tied up with major home retailing ventures such as Home Town, @ Home and Home Stop to set up shop-in shops. “We would like to expand our retail footprint wherever there is an opportunity.”

Kurl-on has set up its own retail concept Kurl-on Nest to display its entire range of products. Besides retailing mattresses, it will also be retailing bed and bath linen, apart from upholstery and furniture.

Speaking on furniture retailing, he said the company will be contract manufacturing its furniture range. “We will leverage on our design team who will customise products for the Indian market,” he said adding the company is looking to corner 15% of the Rs 30,000 crore home retailing market with this venture.

Friday, April 09, 2010

ICOMM Tele looks to raise 200Cr rupees in IPO

The Hyderabad-based EPC firm is backed by Kotak SEAF and Tano Capital.

Kotak SEAF India Fund and Tano Capital-backed engineering, procurement and construction company ICOMM Tele is looking to raise Rs 200 crore through its maiden public issue. The private equity investors are staying put having invested two years ago.

Kotak SEAF-backed India Growth Fund had invested Rs 70 crore in Feb’08 and it currently holds 10.2% stake with an average cost of purchase at Rs 172.23. Tano had purchased shares from the promoters around the same time and it currently owns 5.1% in the company.

The issue comprises fresh issue besides part sale of shares by the promoters. Incidentally, both the private equity investors have entered into a sale agreement to sell undisclosed stake to the promoters or the employee welfare trust.

One of the early investors in the company was India Private Equity Fund that put in around Rs 56.25 crore way back in 1996, arguably one of the earliest PE/VC deals in the country. However, IPEF does not figure among the current shareholders which means it exited few years ago by selling out to the promoters.

The Hyderabad-based company is promoted by 34-year-old Sumanth Paturu and family. For the 15-month period ended September’09 the company had total income of Rs 913 crore with net profit of Rs 25.1 crore as against total revenues of Rs 1,070.8 crore with net profit of Rs 75.47 crore for the twelve months ended June’08.

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YOU Broadband & Cable plans Rs 360 crore IPO

YOU Broadband and Cable India, cable broadband service provider, proposes to enter capital market with a public issue to raise around Rs 360 crore. This is the third company from the broadband space approaching IPO route since October 2009; first two were Den Networks and Hathway Broadband.

YOU Telecom (Mauritius) holds 82.44% stake in the company, 8.27% is with YOU Telecom Employee & Welfare Trust and 4.41% is with Bennett Coleman & Company.

The company commenced operations in 2001 and currently provides high-speed broadband cable internet services to residential and enterprise segment customers across 11 cities in India. As of September 30, 2009, it owned and operated over 990 kilometers of fiber optic cable and over 4,100 kilometers of trunk coaxial cable network, supported by 11 NOCs. As of September 30, 2009, its residential broadband internet service subscriber base aggregated approximately 200,779 customers.

It intends to use issue proceeds for capital expenditure in connection with broadband business (of Rs 1,57.39 crore); acquisition of additional equity shares in Digital Outsourcing Private Limited (Rs 12.83 crore); investment in Digital Outsourcing Private Limited by way of providing loans and/or through purchase/subscription of an equity interest therein for purchase of set-top boxes, head-end equipments, software, other related equipment, and acquisition of customers in connection with cable network services (Rs 85 crore); expenses towards working capital (Rs 17.1 crore ); repayment of outstanding loan (Rs 4.84 crore) and for general corporate purposes.

The company has been loss making since last five financial years. For the period of six months ended on September 2009, it has reported loss of Rs 9.096 crore on total income of Rs 37.65 crore.

The book running lead manager to the issue is Edelweiss Capital Limited and Karvy Computershare Private Limited is the registrar.

Ravi Kumar Distilleries To Go Public; Files DRHP

Ravi Kumar Distilleries Limited plans to raise funds through IPO by issuing 11.5 Mn equity shares.

The company plans to dilute 47.92% of its post issue capital.

The issue will be managed by Comfort Securities Pvt Ltd.

The funds will be used to expand the existing capacity of its manufacturing unit, instillation of re-distillation plant, part finance marketing and branding and for its working capital requirements.

Transaction Reference: DRHP filed with SEBI
Transaction Note

Ravi Kumar Distilleries Limited is a manufacturer of Indian Made Foreign Liquor under its brands and as well as tie-up arrangement with various liquors companies of India.

The company, incorporated in 1993, is promoted by R.V. Ravikumar. At present, the promoter and promoter group hold 100% stake in the company.

Radico Khaitan Ltd., Shashi Distilleries Pvt. Ltd., John Distilleries Ltd., Gemini Distilleries (Pondy) Pvt. Ltd., Mondovi Distilleries & Breweries Pvt. Ltd have tie ups with Ravi Kumar for manufacturing and marketing of their popular brands like 8 PM Rare Whisky, Radico Gold etc.

The expenditure on the unit is expected to cost around Rs 11 cr.

The company has a balance sheet size of Rs 53 cr. For the year ended March 09, Ravi Kumar Distilleries reported net profit of Rs 1.7 cr over a turnover of Rs 43 cr.

Commercial Engineers files IPO papers with SEBI

Commercial Engineers and Body Builders Company has filed a Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) for an initial public offer (IPO).

The issue consists of a fresh issue by the company aggregating upto Rs 170 crore and an offer for sale of 1,698,430 equity shares by New York Life Investment Management India Fund (FVCI) II LLC and Commercial Automobiles Private Limited.

Its business comprises of manufacturing vehicle bodies for commercial vehicles, refurbishment of wagons and manufacture of components for wagons, coaches and locomotives for the Indian Railways.

Kailash Gupta, Ajay Gupta and NYLIM hold 29.48%, 26.30% and 23.30% stake in the company.

Funds raised by offering fresh issue will be used for capital expenditure for the railway project; prepayment of identified loan facilities and general corporate purposes.

For the period of nine months ended on December 31, 2009, it has reported profit after tax of Rs 10.65 crore on total income of Rs 111.21 crore. It has debt of Rs 47.84 crore on its books till the same period.

The book running lead managers to the issue are ICICI Securities Limited and Edelweiss Capital Limited. Karvy Computershare Private Limited is the registrar to the issue.

C.Mahendra Exports seeks regulatory nod for IPO

Diamond jewellery maker C.Mahendra Exports Ltd said on Thursday it has filed for regulatory approval of a planned initial public offering (IPO) of 15 million shares.

The firm plans to raise funds for setting up of a diamond processing unit at Gujarat Hira Bourse, special economic zone near Surat and a jewellery manufacturing unit in Mumbai, it said in a statement to the exchange.

It will also use the proceeds for setting up retail outlets and in brand development, it said.

Yes Bank and Anand Rathi Advisors Ltd are the book running lead managers for the proposed IPO.

Friday, April 02, 2010

Raheja Universal files DRHP for Rs 864 cr IPO

A Mumbai-based realty firm Raheja Universal has filed a draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (Sebi). It is looking to raise upto Rs 864 crore through this issue.

The company is considering pre-initial public offer (IPO) placement of up to 65 lakh equity shares aggregating upto Rs 200 crore with various investors.

For the period of six-months ended on September 30, 2009, the company reported net loss of Rs 11.97 crore and total income of Rs 358.74 crore. It has debt of Rs 885.69 crore on its books.

It had a total unconsolidated debt of Rs 673.4 crore and as of February 2010, 63% of unconslidated debt was with one lender.

The company intends to use the issue proceeds for construction and development expenses of RICC-I –Tower 1 (Rs 315 crore for this project), a commercial Ongoing Project; acquisition of land and/or land development rights (Rs 175 crore); pre-payment and/or re-payment of certain loans availed by company (Rs 158.5 crore); and general corporate purposes.

Raheja Universal is one of the leading real estate development companies in India with operations primarily in the Mumbai Metropolitan Region. It currently owns or holds development rights for 103.48 million sq. ft. of developable area of which saleable area is 70.19 million sq. ft. Residential projects represent 59.78 million sq. ft. developable area and 44.08 million sq. ft. saleable area. Commercial projects represent 43.70 million sq. ft. developable area and 26.11 million sq. ft. saleable area.

The book running lead managers to the issue are Kotak Mahindra Capital Company Limited, Enam Securities Private Limited, Citigroup Global Markets India Private Limited and Morgan Stanley India Company Private Limited. Link Intime India Private Limited is the registrar.