Indian IPO

All details about Hot Indian Primary Market.

Tuesday, March 30, 2010

Standard Chartered to list Indian Depository Receipts in India

Standard Chartered PLC considering to issue and list Indian Depository Receipts in India, making it the first overseas company to do so there.

It said on its website on Tuesday, March 30 the IDRs represent underlying new ordinary shares in the banking group.

Standard Chartered, which is also listed in Hong Kong, said it had filed a draft red herring prospectus (DRHP) with the Securities and Exchange Board of India. The listing of IDRs is subject to market conditions and further regulatory approvals.

Standard Chartered group chief executive Peter Sands, commenting on the public filing of the DRHP, said: “Our intention to be the first company to list IDRs demonstrates how important India is to Standard Chartered.

"India is one of our largest and fastest-growing markets and achieved over USD1 billion in profits in 2009. We have a 150-year heritage in India. This is a unique opportunity to raise our profile and allow investors in India to participate in our future."

On the rationale for the IDR issue, it said the banking group had demonstrated a consistent track record of sustained financial performance across our markets in Asia, Africa and the Middle East.

"2009 was the seventh consecutive year of record income and profit, delivering compound annual growth rates of 19 per cent in income and 22 per cent in profit over that period. The company’s significant operations in the Asia region accounted for over 75% of its US$5.15 billion total profit before taxation for the year ended Dec 31, 2009," it said.

Standard Chartered said the listing of IDRs – expected to be the first by an overseas company - would be an unequivocal demonstration of the company’s commitment to India.

This move would facilitate a step change in market visibility and brand value in one of its key markets by significantly increasing the Company’s profile in India. India is one of Standard Chartered’s key Asian markets - generating over US$1 billion in profit.

"The listing provides Indian residents with an opportunity to invest in the company and participate in its growth," it said.

It appointed UBS Securities India Private Ltd and Goldman Sachs (India) Securities Private Ltd (as global coordinators); and JM Financial Consultants Private Limited, DSP Merrill Lynch Ltd, Kotak Mahindra Capital Co. Ltd and SBI Capital Markets Ltd as book running lead managers.

It appointed its STCI Capital Markets Ltd as a co-book running lead manager.

Saturday, March 27, 2010

SKS first microfinancier to float IPO

SKS Microfinance Ltd, the country’s largest microfinance company, plans to raise Rs 1,100 crore ($250 million) through an initial public offering (IPO).

As per its draft offer document filed with the Securities and Exchange Board of India, the issue comprises 1.67 crore shares, accounting for 21.6% of the company’s fully diluted post-issue capital. This includes a fresh issue of 0.74 crore shares and an offer for sale of 0.93 crore shares by certain selling shareholders.

Mauritius Unitus Corporation and Sequoia Capital India are among the shareholders looking to sell shares through the issue.

According to the offer document, Sequoia, which has been an early investor in companies such as Google and Yahoo, started buying stake in SKS in March, 2007 at Rs 49.77 a share. It plans to sell about 4 million shares, or less than a third of its stake, through the IPO.

At least 60% of the IPO shares will be available for institutional investors.

Net proceeds from the fresh issue would be used to augment the future capital requirements of the company arising out of growth in its business.

The book running lead managers to the issue are Kotak Mahindra Capital, Citigroup Global Markets India and Credit Suisse Securities (India).

The company is to be listed on the National Stock Exchange and the Bombay Stock Exchange.

The company, founded by former McKinsey & Co management consultant Vikram Akula, lends to the rural poor, especially women, on a for-profit basis.

It received a non-banking finance company licence from the Reserve Bank of India in 2006 and currently has 5.3 million customers. Going by an October, 2009 report by Crisil, it is India’s largest microfinance company by value of loans outstanding, the number of borrowers and number of branches. It had 24 regional offices and 1,627 branches spread across 19 states as of September 30.

The market for the issue is expected to be strong going by the response to recent fundraising attempts by the sector.

Companies such as Grama Vidyalaya Microfinance Ltd, ESAF Microfinance Ltd and Navachetna Microfin Services have used various debt and equity options including securitisation and non-convertible debentures, drawing participation from asset managers such as Bajaj Allianz Life Insurance, ICICI Prudential Asset Management, Canara Robeco Mutual Fund and Religare Asset Management.

“There is a large population out there, which is not covered by the formal banking sector, which should be really helped by microfinance institutions. I believe there should be a great deal of enthusiasm for the sector, though the exact fundamentals would have to be examined before investment,” said Sanjeev Patni, president and head of institutional equities at Prabhudas Lilladher.

Thursday, March 25, 2010

Mahindra First Choice looks at IPO in three years

Mahindra First Choice Wheels, the company that was created by Mahindra & Mahindra for trading in used cars and is currently jointly owned by M&M, HDFC and a PE fund, is looking at an IPO in about three years, according to Rajeev Dubey, President (HR, After-market & Corporate Services), Mahindra & Mahindra.

He did not want to disclose the name of the PE, but earlier media reports have it that Phi Advisors, an India-based PE, picked up 10% in the company in 2008 for Rs 80 crore.

Mahindra First Choice Wheels is today a Rs 400-crore company. It would have sold over 18,000 cars in the current year, compared with 10,250 last year, and expects its sales to double next year.

Today, the company announced a tie-up with MyTVS, the services business arm of TV Sundram Iyengar & Sons, under which anyone who buys a car from Mahindra First Choice can avail himself of the ‘roadside emergency services' of MyTVS free of charge in the first year of the vehicle purchase.

MyTVS has a 2,500-strong service network in 1,400 towns and cities “which implies that we can reach out to customers in distress wherever they may be,” said R Dinesh, Joint Managing Director, TV Sundram Iyengar & Sons.

Shubhabrata Saha, Chief Executive Officer, Mahindra First Choice Wheels, noted that the dynamics of the used-car business was changing with customers opting to deal with organised players as opposed to local dealers. Proof of this is the fact that Mahindra First Choice's sales are growing 80-100% annually, while the market is growing around 20%. Saha said B and C class towns are seeing a lot of action which will “provide depth and penetration to our business.” He said these cities do not have organised players and consequently buyers and sellers go to brokers, who mostly do not have the same capabilities as an organised player — in terms of choice of models and bundling finance and other services.

These smaller cities and towns, therefore, are on Mahindra First Choice's radar. The company today has 118 outlets and intends to double it over the next year.

Tuesday, March 23, 2010

StanChart gets nod to file draft IPO prospectus: Sources

Standard Chartered has received approvals to file its draft red herring prospectus with the Securities Exchange Board of India (SEBI), sources told CNBC-TV18. The bank has also received approval from the Reserve Bank of India.

However, Standard Chartered's board is yet to decide when to file its draft red herring prospectus and the quantum of fund raising.

On March 3, Jaspal Bindra, Standard Chartered's Asia CEO, told Reuters that Standard Chartered Plc expects to list in Mumbai in the first half of this year.

Greatship mulls IPO, to file DRHP in 2-3 months

Greatship, the wholly-owned subsidiary of Great Eastern Shipping Company, today said it is mulling an initial public offer (IPO) and may file the draft prospectus with the market regulator Sebi in the next 2-3 months.

"The board of the company today approved that Greatship may consider approaching the public for an IPO. We are likely to file our Draft Red Herring Prospectus (DRHP) within three months," Greatship Managing Director Ravi K Sheth told PTI here.

The proceeds of the IPO would be used to fuel the company's expansion, he said, adding "we want to have a global footprint."

However, the size of the IPO and its timing will be subject to market conditions and obtaining the necessary regulatory approvals, Sheth said.

When asked how much was the company planning to dilute, he declined to comment.

It is, however, understood that the company might dilute up to 30 per cent. The company is also understood to have Barclays, Kotak and Edelweiss as bankers to the issue.

The timing of the IPO will be dictated by then-prevailing market conditions, Sheth said. The company was also open to other modes of raising finance, besides IPO, he said.

Greatship provides energy and offshore services to exploration and production operators internationally. The company was incorporated in 2002 and is based in Mumbai and Singapore.

Microsec Fin to enter capital mkt; files DRHP with Sebi

Microsec Financial Services today said it is planning to come out with an initial public offer and has filed draft papers with market regulator the Securities and Exchange Board of India (Sebi) in this regard.

The company has filed its draft red herring prospectus (DRHP) with the Sebi for an IPO of 12.5 crore shares of Rs 10 each, at a price range to be determined through book building process, Microsec Financial Services said in a statement.

Microsec provides various financial products and services to various target clients. The issue constitutes 39.3 per cent stake.

The company intends to utilise majority of the proceeds towards the expansion of its financing business, it said.

The company is also raising funds to expand its network of branches and enhance existing technological capacities of the broking business, it added.

SBI Capital Markets is the sole book running lead manager to the issue.

Water treatment firm Va Tech Wabag files for IPO

Va Tech Wabag, the country’s largest water treatment company, will soon debut on the stock exchanges. The Draft Red Herring Prospectus (DRHP) has been filed with Securities and Exchange Board of India (Sebi) and the initial public offer (IPO) may happen within six months.

The Rs 1,155-crore company is approaching the capital markets to accumulate money to bid for Build-Own-Operate and Transfer (BOOT) water treatment projects, and for acquisitions. It also wants to create information technology systems within the company.

“The retail portion of the IPO will be about 35 per cent. The primary issue is likely to be for Rs 123 crore. We are working out the details with bankers on the quantum of funds to be raised,” said S Varadarajan, a promoter and chief financial officer of Chennai-based Va Tech Wabag.

Enam Securities and IDFC Capital are lead managers for the issue.

The promoters — Rajiv Mittal, Amit Sengupta, Shiv Narayan Saraf and S Varadarajan — hold 37.45 per cent stake in the company. ICICI Venture, which was earlier holding 31 per cent stake in the company, had exited partially.

Some foreign institutional investors also hold a minority stake.

In 1999, the Austrian group VA Tech acquired the water business of Deutsche Babcock, operating under the Wabag brand name. Va Tech Wabag Ltd was formed in 2000 and six years later, the majority shareholding of the company was acquired by ICICI Venture and the promoters.

In 2007, Va Tech, the Indian subsidiary, had acquired its parent, Va Tech Wabag GmbH of Austria from Siemens for about $100 million

For the year ended March 31, 2009, the company had consolidated income and total profit after tax of Rs 1,155 crore and Rs 34.9 crore, respectively. Its order book on December 31, 2009, was Rs 3,171 crore.

Ambience gets Sebi's nod for Rs 1,300 cr IPO

Realty firm Ambience today said it has received approval from the Securities Exchange Board of India (Sebi) to launch initial public offer (IPO) and is waiting for the right time to hit the capital market.

The company had filed the draft red herring prospectus (DRHP) in September last year to raise up to Rs 1,293 crore.

"We received clearance in February. We are waiting for the suitable and opportune time for the launch," Ambience Group Chairman Raj Singh Gehlot told PTI when asked whether the company has got the Sebi nod to bring IPO.

Besides Ambience, Emaar MGF and Lodha Developers have also got the Sebi's approval for their IPO but are yet to hit the market. Early this month, Emaar MGF had said that its board of directors are considering an opportune time to open our IPO.

While, many public offers including those of PSUs have managed to get fully subscribed the demand has not been much, particularly for big-ticket issues.

Ambience plans to dilute between 10 and 15 per cent to raise nearly Rs 1,300 crore through maiden public offer. It would utilise about Rs 475 crore to make part repayment of Rs 2,500 crore debt, while another Rs 470 crore would be deployed for constructions of existing and future projects.

About Rs 150 crore will be used for paying external development charges for some projects awarded by the Haryana government.

The Delhi-based firm has a land bank of 800 acres, of which about 100 acres are under development. It plans to develop the remaining land over the next 3-4 years.

Monday, March 22, 2010

Sahara may go in for an IPO to fund Pune franchise

Sahara Group was the highest bidder at USD 370 million to bag Pune and Rendezvous Sports bid USD 333.33 million to get Kochi as the two new franchisees to make the Indian Premier League (IPL) a 10-team affair from the 2011 season. The Sahara Group had the option of choosing from Ahmedabad, Nagpur and Pune as their home, but the corporate from Lucknow picked Pune as its host city.

Commenting on the same, Subrata Roy, Managing Worker and Chairman, Sahara India Pariwar, said the company is in talks with two banks on funding the Pune franchise. "We have been approached by UK-based clubs, Indian companies for partnerships. We can also go in for an initial public offer if bank funding or partnerships do not work out."

Roy said it is difficult to talk about team composition at this stage.

He is awaiting nod from the Securities and Exchange Board of India (SEBI) for Sahara City's initial public offering. "We are definitely going ahead with the IPO. The timing is yet to be decided. We plan to raise Rs 3,000 crore from the Sahara City IPO."

Roy is open to offloading stake in Aamby valley. "We have been approached by companies from West Asia, US."

Speaking on the court case with Jet Airways, he said Sahara wants to settle this dispute out of court and have sent the former a proposal to the same.

UCO Bank plans follow-on offer to raise Rs 400 cr

UCO Bank, according to its Chairman & Managing Director, S K Goel, has decided to raise capital by way of a follow-on public offer (FPO) instead of a Qualified Institutional Placement (QIP), the objective being to broadbase the shareholding.

The bank proposes to issue six crore equity shares at a face value of Rs 10 each. This, coupled with the premium, should help the bank raise about Rs 400 crore, Goel said pointing out that the offer would hit the market by end-May.

Earlier, the bank, at its extraordinary general (EGM) on March 2, had taken shareholder's approval to raise funds either through an FPO or QIP. The bank has already received the approval of its board, Government and the Reserve Bank of India for the FPO.

Though QIP was a cheaper route vis-à-vis FPO, the government favoured an FPO on the ground of broadbasing of ownership, unlike QIP where shares would be concentrated in a few hands, Goel said. “The cost for a QIP issue works out to less than one per cent while the same for an FPO is close to three per cent. However, FPO is broad based as compared to QIP,” he observed.

The proposed FPO, when completed, would bring down the government stake in the bank from 63.59% to 58.60%, he said.

UCO Bank, Mr Goel said, was hopeful of receiving capital infusion of Rs 500 crore from the government under the recapitalisation scheme by the end of this fiscal.

Friday, March 19, 2010

Persistent IPO clocks highest bid in 26 mths at 93 times

The public issue of Pune-based software product development company Persistent Systems has received record subscription in 26 months.

It got overwhelming response from investors, especially qualified institutional investors (QIBs). Overall, the issue has been oversubscribed 93.16 times, as per data available on the NSE website.

Earlier, Future Capital Holding's issue was subscribed over 133 times, which opened during January 11-16, 2008, just before the subprime crisis.

The 54,19,706 equity shares IPO, which closes today, has received bids for nearly 50.5 crore shares.

The reserved portion of QIBs got subscribed 117 times and high networth individuals 100 times, reports CNBC-TV18.

The issue consists of a fresh issue of 41,39,000 equity shares and an offer for sale of 12,80,706 equity shares by Dr Shridhar Bhalchandra Shukla and Vijayalaxmi Shridhar Shukla and Ashutosh Vinayak Joshi.

The company will raise around Rs 157.17-168 crore at price band of Rs 290-310 per equity share. Promoters' holding will be reduced to 38.83% from 43.31% post issue.

The company will received only Rs 128.31 crore from the issue while the rest of money will go to selling shareholders.

The objects of the issue are to establish development facilities; capitalise subsidiaries for establishing development facilities and meeting fit outs and interior design costs; procure hardware and fund expenditure for general corporate purposes.

It is an OPD specialty company, offering customers the benefits of offshore delivery. It designs, develops and maintains software systems and solutions, create new applications and enhance the functionality of customers‘ existing software products.

The book running lead managers to the issue are Enam Securities Private Limited and JP Morgan India Private Limited. Link Intime India Private Limited is the registrar.

Goenka Diamond plans IPO to raise up to Rs 145 cr

Jewellery manufacturer and retailer Goenka Diamond and Jewels on Friday said it plans to raise up to Rs 145 crore through initial public offer for which it has fixed the price band between Rs 135 and Rs 145 per share.

"We plan to raise up to Rs 145 crore through our IPO. We will use the proceeds to set up jewellery manufacturing and diamond processing facilities in Mumbai and also expand our retail outlets in India," Goenka Diamond and Jewels Managing Director Nitin Goenka said in Mumbai.

The company plans to issue one crore equity shares with a face value of Rs 10 each. The issue will constitute 30.93 per cent of the fully-diluted post-issue paid-up capital of the company.

The issue opens on March 23 and will close on March 26. "We will invest at least Rs 7-8 crore to set up jewellery manufacturing and diamond processing facilities and another Rs 7 crore for opening new outlets. We will invest Rs 25 crore to expand our existing facility in Russia," Goenka said.

The company will require more than Rs 85 crore for working capital, he said.

"The company will scale up the number of outlets pan-India to 19 from the six stores by FY 2012. Out of 19 stores, the company will open 17 Ceres outlets and 2 G Wild stores in Tier I and Tier II cities," he said.

Wednesday, March 17, 2010

StanChart may file papers for $1b IDR issue by March-end

Standard Chartered, which is planning to raise $1 billion through Indian Depository Receipts (IDR), is likely to file the draft red herring prospectus with the market regulator, Securities Exchange Board of India, by end of March. This will be the first ever IDR issue by any global company.

“We clearly intent to have an IDR offering and we are looking forward to raise up to $1 billion, depending on the market conditions,” Neeraj Swaroop, chief executive officer, Standard Chartered (South Asia) said at the sidelines of a microfinance conference organised by Ficci here on Wednesday.

“We could only have started the process for DRHP filing once the group’s annual results were made public — these were announced on March 3. This (the filing) could happen in the second quarter of 2010 subject to market conditions,” a bank official told Financial Chronicle.

IDR rules to be relaxed to boost participation

The Reserve Bank of India (RBI) and the Securities and Exchange Board of India (Sebi) are likely to provide more flexibility to companies issuing Indian Depository Receipts (IDRs).

RBI is likely to allow banks to participate in these issues, something not allowed at present. In addition, a single institutional investor will be permitted to buy up to 15 per cent of the issue. The present ceiling is 5 per cent.

The moves are part of the review of the IDR policy, which has not been attractive enough for foreign companies. So far, only Standard Chartered Bank has evinced interest in taking the IDR route to raise capital.

In New Delhi, the bank’s South Asia CEO, Neeraj Swaroop, told reporters that Standard Chartered planned to raise between $500 million (around Rs 2,250 crore) and $1 billion (around Rs 4,500 crore) during the next quarter. “We remain keen to pursue our intent to have an IDR offering ... We are looking at quarter two (April-June 2010),” Swaroop said on the sidelines of an event on microfinance.

The offering was subject to market conditions and the bank would have to take a final decision, he said. The IDRs will be issued by parent entity Standard Chartered Plc.

Banks are among the latest set of investors to be allowed to invest in IDRs, with rules eased over the past few years to allow foreign institutional investors to participate. The Insurance Regulatory and Development Authority, however, does not allow insurers to invest in IDRs. In addition, Sebi has allowed 30 per cent reservation for retail investors.

Like American (or Global) Depository Receipts, through which Indian companies raise resources overseas, IDRs enable foreign companies to do the same in India.

The government notified the IDR rules in 2004. Sebi norms, too, have been in place for some time. However, the rules are still evolving, with a number of clarifications and relaxations during the course of Standard Chartered’s interaction with the regulatory agencies.

Investment banks said Standard Chartered’s issue might hold the key for more issues in the future, though most investors abroad would not tap the route to raise capital. “It will be part of the overall brand-building exercise. Companies which want to be seen as local players and not foreign companies will opt for this route,” said an executive with an international bank.

According to Sebi guidelines, only companies that are listed in their home market for at least three years and have been profitable for three of the preceding five years can issue IDRs.

Shree Ganesh plans to raise Rs 375 cr via IPO

Kolkata-based Shree Ganesh Jewellery House, an exporter of handcrafted gold jewellery, plans to tap the capital market through an initial public offer (IPO) to fund expansion plans.

The company, which also exports to West Asia, Singapore and Hong Kong, plans to issue 142,69,831 equity shares having a face value of Rs 10 each. Though the price band has not been revealed, sources said it could be priced between Rs 260 and Rs 275 a share, with the company raising Rs 375 crore at the higher end and Rs 360 crore at the lower end of the band.

Credit Suisse, which invested USD 20 million for about 11% equity stake in the company in March 2008, will offload a part of its holding for Rs 60 crore.

Umesh Parekh, Managing Director, Shree Ganesh Jewellery, said the company would invest Rs 150 crore to expand capacity at its jewellery manufacturing units at Mandal Pada and Domjur, besides setting up a modern manufacturing unit at Manikanchan SEZ, in Kolkata.

The company intends to set up a two-tonne capacity gold refinery unit with an investment of Rs 5 crore. The unit will recycle gold jewellery. The refinery would enhance profits by 3% to 4%, said Parekh.

“The country recycles about 200 tonnes a year of old jewellery, which passes through three to four intermediaries before coming for refining. Collecting directly from customers will result in substantial savings,” he said.

Shree Ganesh plans to add more retail outlets – from the existing 10 to 40 in two years. The retail outlets will also accept old jewellery of any make for recycling.

Due to lower production cost, the company plans to invest Rs 15 crore on brand building and offer jewellery at a rate that is at least 10 per cent lower than what competitors offer.

Besides Gaja, the company owns seven other brands targeted at different categories, such as Sitaare (for children), GM Gold (one-gram gold), Marigiold (small pieces), G Elements (22k gold jewellery for men), Gold Bridals, Dianique (designer diamond jewellery), YOU (18k diamond heart collection) and Distar.

Intrasoft Technologies IPO to open on March 23

Intrasoft Technologies has decided to open its initial public offering (IPO) for subscription on Tuesday March 23, 2010 and will close on, Thursday, March 26, 2010.

Intrasoft Technologies operates the website www.123greetings.com, which is by number of unique visitors, is the largest electronic greeting cards website in India and second largest greeting card website in world (according to comScore Media Metrix during the 12 month period from November 2008 to October 2009).

It has been assigned a ‘CARE IPO GRADE 3’ indicating average fundamentals for its proposed IPO by Credit Analysis and Research.

Intrasoft has filed the red hearing prospectus with SEBI and ROC to enter the capital markets with an IPO of 37, 00,000 equity shares of face value of Rs 10 each for cash at a price to be decided through a 100% book-building process. The issue will constitute 25.12% of the post issue paid up capital of the company.

The company is approaching the capital markets to fund their requirements for branding & promotions, purchasing corporate office in Kolkata, investment in technology infrastructure and general corporate purposes.

The shares of Intrasoft Technologies will be listed on the BSE and NSE.

Collins Stewart Inga Pvt. Ltd. and Anand Rathi Advisors Ltd. are the book running lead managers to the issue

Sunday, March 14, 2010

Sequoia Cap to turn promoter of SKS Microfinance

Venture capital fund, Sequoia Capital India is set to become a promoter of India's largest microfinance institution, SKS Microfinance, reports CNBC-TV18, quoting Mint.

Sequoia, which currently owns 24% in SKS, will lead three other venture capital firms in the move. This is the first time in India that venture capital investors are becoming promoters of a company that is going in for a public offer.

Sandstone Capital, with a 12% stake, and Kismet Capital Advisors, with a 17% stake, are the other two investors. The third will be SKS Trust for the benefit of women entrepreneurs, with a 15% stake.

The move comes even as SKS Microfinance gears up to tap the capital markets with an initial public offering.

The four venture capital firms will replace SKS founder Vikram Akulaas as the promoter.

Saturday, March 13, 2010

Persistent Systems IPO to open on March 17

Pune based software product development company Persistent Systems is entering capital market with an initial public offering (IPO) of 54,19,706 equity shares of Rs 10 each on March 17, 2010.

The issue consists of a fresh issue of 41,39,000 equity shares and an offer for sale of 12,80,706 equity shares by Dr Shridhar Bhalchandra Shukla and Vijayalaxmi Shridhar Shukla and Ashutosh Vinayak Joshi. The issue comprises a net issue to the public of 48,77,730 shares and a reservation of up to 5,41,976 equity shares for eligible employees. The issue will constitute 13.55% of the fully diluted post issue paid-up capital of the company.

The company will raise around Rs 157.17-168 crore at price band of Rs 290-310 per equity share. Promoters' holding will be reduced to 38.83% from 43.31% post issue.

The company will received only Rs 128.31 crore from the issue while the rest of money will go to selling shareholders.

The objects of the issue are to establish development facilities; capitalise subsidiaries for establishing development facilities and meeting fit outs and interior design costs; procure hardware and fund expenditure for general corporate purposes.

It is one of the market leaders in outsourced software product development services. It is an OPD specialty company, offering customers the benefits of offshore delivery. It designs, develops and maintains software systems and solutions, create new applications and enhance the functionality of customers‘ existing software products.

The book running lead managers to the issue are Enam Securities Private Limited and JP Morgan India Private Limited. Link Intime India Private Limited is the registrar

Tuesday, March 09, 2010

SKS Microfinance To File For IPO In 3-4 Weeks



SKS could mop up anywhere between $200-$350 million, some of which might be raised through a pre-IPO placement.

SKS Microfinance, an Indian firm that makes small loans to poor borrowers, plans to file application papers for an IPO in 3-4 weeks, three sources with knowledge of the deal said.

The exact size and structure of the fundraising was not yet determined, with one source putting the figure at roughly $200 million, some of which might be raised through a pre-IPO placement. Another source said the company could raise $250-$350 million.

The sources did not wish to be named as they were not authorised to speak with the media.

SKS founder Vikram Akula declined to comment.

The for-profit company is India's largest microfinance institution and is backed by private-equity firms such as Sequoia Capital, Kismet Capital and Sandstone Capital.

Citigroup, Kotak Mahindra and Credit Suisse are arrangers for the IPO, sources said.

While microfinance has existed in many forms for decades, the sector has burgeoned into a large market since Muhammad Yunus, a Bangladeshi economist, was awarded the Nobel Peace Prize in 2006 for his efforts to increase access to finance for the poor.

In the year ended March 2009, SKS made a profit of 802.2 million rupees, while in the first half of the 2010 financial year, it earned 556 million rupees.

The company was founded by Vikram Akula, who has been named one of the world's most influential people by Time magazine.

Monday, March 08, 2010

Bill in LS to allow SBI to raise more capital from market

A bill, seeking to reduce Centre's shareholding in the State Bank of India (SBI) from 55 per cent now to 51 per cent and to allow the bank to raise more capital from the market through preference shares, was introduced in the Lok Sabha on Monday.

Finance Minister Pranab Mukherjee moved the State Bank of India (Amendment) Bill, 2010, amidst slogan shouting by SP, RJD and BSP members against the women's reservation bill in its present form.

The bill's statement of objects and reasons said the legislation was aimed at allowing "reduction of shareholding of the Central government from 55 per cent to 51 per cent consisting of the equity shares of the issued capital."

It said the SBI Act, 1955, was amended in 1993 to enable the bank to access capital market. "While SBI can access capital market by issuing equity shares or bonds, or by both equity shares and bonds, there is no express provision under the SBI Act to enable the bank to issue preference shares and also bonus shares," it added.

"The amendment bill seeks to provide for enhancement of the capital of State Bank by issue of preference shares, to enable it to raise resources from the market by public issue or preferential allotment or private placement," it said.

"The bill also aims to provide for flexibility in the management of the bank," it added.

It will provide for increasing the authorised capital of the SBI to Rs 5,000 crore and enable the Central government to increase or reduce the authorised capital in consultation with the Reserve Bank of India.

IL&FS Transportation IPO opens on Mar 11, to raise Rs 700 cr

IL&FS Transportation Networks (ITNL) today said it plans to raise Rs 700 crore from its initial public offer and take up international airport development projects in association with the Airports Authority of India

The price band of the public offer has been fixed between Rs 242 and Rs 258.

"We plan to hit the capital market on March 11 and aim to raise up to Rs 700 crore through our IPO. Of the total funds raised, Rs 530 crore will go towards repayment of debt and the rest for new projects," ITNL Managing Director K Ramchand told reporters here today.

The company also plans to undertake various airport projects with Airports Authority of India (AAI).

"We are looking at international airport projects in association with our strategic technical advisor, Airports Authority of India. We will bid for such projects at the right time," Ramchand said.

Part of the proceeds of the IPO will go towards repaying the debts to the tune of Rs 1,000 crore.

"We have a Rs 1,000 crore debt and plan to repay Rs 530 crore," he said. ITNL filed its draft red herring prospectus (DRHP) with the Sebi on September 29 last year.

ITNL is engaged in road development, which constitutes over 90 per cent of its business. It has won one project each in metro rail and urban bus transportation, he said.

"The feel good factor is back in the market and there is a momentum happening in the road sector. We think this is the right time to hit the capital market," he said.

ITNL has its hands full with several projects at diffrerent stages.

"The company has an order book of Rs 9,000 crore. We have 19 projects under our portfolio and have already completed 9 projects," he said, adding the remaining would be completed within two years.

The issue closes on March 15.

Enam Securities and Nomura Financial Advisory and Securities (India) and JM Financial Consultants are the book running lead managers to the issue. The Co-BRLMs are Avendus Capital and SBI Capital Markets.

BSNL to offer 5% equity to public Another 5% for private investors

State-run Bharat Sanchar Nigam Ltd (BSNL) plans to raise money through a maiden float and private placement of shares.

In a meeting held on Friday, the BSNL board decided to offload 5 per cent equity to the public and 5 per cent to private entities, said sources.

The board had cleared a plan to divest 10 per cent through an initial public offering (IPO) in 2008 to raise about Rs 10,000 crore.

The company’s union is against divestment as it may lead to job losses. The BSNL board had proposed to give preferential shares to its employees to convince the union of the merits of listing the telecom firm. The proposal was rejected.

BSNL has been losing market share to private entities because of its inability to add to capacity and execute projects in time. It has also scrapped a tender to procure mobile equipment for expansion.

Sources said the state-run telecom firm had other plans in the pipeline, including the sharing of towers and optical fibre backbone with competitors and providing IT services such as security (firewalls) and managed network to other companies.

Earlier, the Sam Pitroda committee — set up by the Prime Minister’s Office to bolster the deteriorating financial health of the company — had suggested the government should sell a 30 per cent stake in the company through an initial public offering and raise funds from the sale of infrastructure assets such as towers and real estate.

Prime Minister Manmohan Singh, worried about the steep decline in BSNL’s profitability over the years, had appointed Pitroda as the head of the committee, which had banker Deepak Parekh and telecom secretary P.J. Thomas as members.

The Pitroda panel had also said BSNL, having 40,000 towers in 20 circles, should follow private companies such as Bharti and Idea Cellular that raised their valuations by selling towers for huge sums.

Another private player Aircel, too, sold 17,500 towers for Rs 8,400 crore to GTL Infrastructure in January.

BSNL’s towers are now worth over Rs 19,200 crore. “The value can be unlocked through strategic sale or an initial public offering,” said the committee.

Friday, March 05, 2010

HT Media Ventures plans Rs 300 cr IPO; files DRHP

HT Media today said its subsidiary Hindustan Media Ventures Ltd plans to raise up to Rs 300 crore through an initial public offer and has filed draft papers with the market regulator SEBI for the same.

Hindustan Media Ventures has filed the draft red herring prospectus with Sebi with respect to its proposed IPO for cash at a price including share premium, aggregating up to Rs 300 crore, HT Media said in a filing to the Bombay Stock Exchange.

HT Media Ltd is the publisher of English daily The Hindustan Times. In addition to Hindustan Times, HT Media also publishes a national business newspaper--Mint.

Hindustan Media Ventures is the publisher of Hindi daily newspaper Hindustan.

Career Point Infosystems plans to raise Rs 115 cr via IPO

Career Point Infosystems plans to raise upto Rs 115 crore via initial public offering (IPO). It has filed draft red herring prospectus (DRHP) with SEBI.

It provides tutorial services to high school and post high school students for various competitive entrance examinations including All India Engineering Entrance Examination, Indian Institute of Technology – Joint Entrance Examination and All India Pre-Medical and Pre-Dental Test.

The company has recently forayed into Education Consultancy and Management Services (‘ECAMS’), catering to K-12 and Higher Education segments. Further, to address larger base of potential students, we have introduced technology enabled education delivery platform for delivering content through ‘TechEdge Class’.

The issue proceeds will be used for construction & development of integrated campus facility; expansion of classroom infrastructure & office facility and acquisitions & other strategic initiatives.

Promoters currently hold 75.35% stake in the company. It includes eight promoters and each one holds over 9% stake in the company.

For the period of six months ended on September 2009, it has reported profit after tax of Rs 9.49 crore on total income of Rs 33.68 crore. It has debt of Rs 0.53 crore.

The book running lead managers to the issue are Centrum Capital Limited and JM Financial Consultants Private Limited. Link Intime India Private Limited is the registrar.

Pradip Overseas IPO to open on March 11

Pradip Overseas, a textile manufacturer with niche focus on home linen products of both, is entering capital market with an initial public offering (IPO) of 1.06 crore equity shares of Rs 10 each on March 11, 2010.

The issue comprises 5 lakh equity shares reserved for subscription by eligible employees and a net issue to the public of 1.01 crore equity shares. The issue will constitute 26.26% of the fully diluted post issue paid-up capital of the company. The issue will close for subscription on March 15.

The objects of the issue are (1) to part finance the setting up the proposed manufacturing facility within the proposed textile SEZ and (2) to part finance the incremental margin money requirement for working capital.

As per the DRHP filed in January 2009, promoters' holding will be reduced to 68.68% from 93.16% post issue.

The book running lead manager to the issue is IL&FS Investsmart Securities Limited and Intime Spectrum Registry Limited is the registrar.

Thursday, March 04, 2010

SEBI clears Emaar MGF public issue

Securities and Exchange Board of India, SEBI has cleared Emaar MGF public issue. According to company officials, timing of issue will be decided soon. The company has a one-year window. However, the officials says, they do not want issue at time of volatily.

Emaar-MGF had earlier planned to tap the markets in February 2008. It was looking to raise over Rs 6,400 crore in the price band of Rs 530-630. But the company had to withdraw the issue due to weak market conditions post the US subprime crisis and was unable to raise the money.

StanChart picks iBankers for India listing

Standard Chartered, the London-headquartered bank that gets 90 per cent of its profits from Asia, Africa and West Asia, has finalised plans to get listed in India by June.

The bank, which has had a presence in India for more than 150 years, will file a prospectus by the end of this month for an issue of Indian depository receipts (IDRs) to become the first foreign company to list on Indian bourses six years after the first IDR rules were framed.

Investment banks Goldman Sachs, UBS, Kotak, DSP Merill Lynch and SBI Caps have been appointed as advisors to the IDR issue.

Neeraj Swaroop, country chief executive, Standard Chartered India, said, “We will file our draft red herring prospectus (DRHP) latest by the end of March. We are looking at raising around $500 million to $1 billion from the listing based on the market conditions.” Swaroop was talking to reporters after announcing the financial results of Standard Chartered's India operations.

Swaroop said the bank has cleared a majority of the regulatory hurdles with the RBI and is now in a position to announce their listing plans. “Some minor approvals have to be obtained but they are more of procedural and hence will be obtained during the filing process.”

India, for Standard Chartered, continues to be the second best market after Hong Kong in the world. Standard Chartered's India operations reported a 19 per cent increase in profit before tax to $1.09 billion in 2009 from $891 million a year earlier. The share of operating profit in the bank's total profit stood at 20.5 per cent in 2009.

The rise in profit was on the back of strong growth in its wholesale business. The bank's operating profit from wholesale business jumped 49 per cent to $1.006 billion in 2009 from $674 million in 2008. “Wholesale banking business is the single largest profit-making business in India,” Swaroop told said in Mumbai. StanChart has 150 wholesale banking clients in India.

The subdued growth in the consumer banking segment continued even in 2009. The bank saw the operating profit from consumer banking business fall 24 per cent to $54 million from $71 million in 2008. “Within the consumer banking, portfolios like SMEs and Mortgages grew faster than other categories,” Shyam Srinivasan, head of consumer banking said.

Wednesday, March 03, 2010

StanChart plans IDR issue by June

In what would be the first instance of equity-raising in India by an overseas-listed company, UK-based Standard Chartered Plc. plans to raise up to $ 750 million (Rs 3, 450 crore) through Indian Depository Receipts (IDR) issue within the first half of the calendar year.

“We have already got advisors and we will file for the IDR issue after our (India) results are published by March-end,” said Neeraj Swaroop, Regional Chief Executive, India and South Asia.

In a statement today, Standard Chartered Group Chief Executive Peter Sands said, “There is a race for which will be our biggest market by profits this year. We have built a superb franchise in India, and this year it is our intention to open a new chapter in our long history there with the listing.”

The Indian branch of Standard Chartered Bank recorded an operating profit of $ 1,060 million (Rs 4,886 crore at today’s rates) for 2010—just $ 2million less than the Hong Kong division’s figures of $ 1,062 million.

Like American or Global Depository Receipts (ADRs/GDRs), where Indian companies raise resources overseas, IDRs enable foreign companies to do the same in India. ADRs and IDRs are derivatives instruments that derive their value from the shares deposited with custodians.

The bank has appointed JM Financial and UBS AG as lead managers to the issue. Goldman Sachs, Bank of America and Kotak Mahindra are the other banks appointed to manage the issue.

Swaroop had earlier told Business Standard that the listing would not have a material impact on the bank’s India operations. “What it does is to help improve our presence in the country because you are bringing one more element to engage with the banking public. So, you are not just bringing in banking services, but you are also bringing in the Standard Chartered stock so they can become investors.”

“It gives the Indian public a chance to participate in the risks and opportunities on the global scene. It also demonstrates to the policy makers our continued commitment because we would not list if we were not planning long term,” Swaroop said.

Tuesday, March 02, 2010

DQ Entertainment IPO to open on March 8

DQ Entertainment (International) (DQE), the Animation, gaming and entertainment production and distribution company, is entering capital market with an initial public offering (IPO) of 1,60,48,011 shares on March 3, 2010.

The price band and the minimum bid lot will be announced by the company at least two working days prior to the issue opening date.

The price of the issue, which will close on March 10, will be determined through the 100% book-building mechanism.

Its promoter DQ Entertainment (Mauritius) Limited's holding will be reduced to 75% post issue.

The company had raised Rs 25.69 crore in a pre-IPO placement in previous month. IDFC had subscribed for Rs 20 crore worth of shares under its IDFC Hybrid Infrastructure Portfolio.

The issue proceeds will be utilised for investment in co-production agreements, focusing on IP content creation; development of office premises and production facilities; development of infrastructure and additional facilities at the SEZ Unit, Kokapet Village, Rangareddy District, Andhra Pradesh and investment in subsidiary, DQ Entertainment(Ireland) Limited.

For the period of six months ended on September 2009, it has reported net profit of Rs 10.17 crore on total income of Rs 73.75 crore.

The equity shares are proposed to be listed on the Bombay Stock Exchange Limited (BSE). The book running lead manager to the Issue is SBI Capital Markets Limited.

DQE is one of the leading producers of animation, visual effects, game art and entertainment content for the Indian as well as global media and entertainment industry. With a workforce of over 2800 permanent employees and a global client - partner base of over 90 producers, distributors, broadcasters and licensors including Walt Disney Television Animation, Nickelodeon Animation Studios Inc., Electronic Arts, Marvel Comics, American Greetings, NBC-Universal, BBC Group, M6/ France TV/ TF-1 Broadcasting groups from France, ZDF Germany and many more world-wide.

DQE's production facilities are based in Hyderabad, Mumbai and Kolkata and it has international sales representatives in Los Angeles, Paris and Tokyo.

UCO Bank FPO likely by April end or early May: CMD

State-run UCO Bank's follow-on public issue of 60 million equity shares will hit market by April end or early May, its chairman and managing director said on Tuesday.

"We had our EGM (extra-ordinary general meeting) today, where we got the shareholders approval for the FPO," SK Goel told reporters.

"We are in the process of finalising the merchant bankers," he said.

The board, in its meeting on January 30, had decided to issue 60 million equity shares with a face value of Rs 10 each at a suitable premium for raising funds.

The bank has government's approval for a follow-on public offer.

ARSS Infrastructure to list on Mar 3, IPO price at Rs 450

Orissa based company ARSS Infrastructure Projects has fixed March 3, 2010 as a listing date for its equity shares issued recently via public issue. It also fixed the issue price at Rs 450 per share, at higher end of price band of Rs 410-450.

The Rs 103 crore IPO, which was opened during February 8-11, had received overwhelming response from investors and subscribed 47.62 times.

Non-institutional investors were the leading subscribers in this issue. Their reserved portion got subscribed 124.5 times. Qualified institutional and retail investors’ reserved portion subscribed 49.3 times and 18.55 times, respectively.

The company is engaged in the business of construction activities in India. It undertakes construction of railway infrastructure, roads, highways, bridges and irrigation projects.

The issue proceeds will be used for investment in joint ventures (at a cost of Rs 5 crore) and funding long term working capital requirement (cost of Rs 86 crore).

The company's order book position was at Rs 28.77 billion as on January 10, 2010 and it had 145 projects in hand as on that date.

Satluj Jal Vidyut IPO likely in Apr: Fin Min official

India is likely to sell shares in state-run Satluj Jal Vidyut Nigam Ltd through an initial public offering in April, Disinvestment Secretary Sumit Bose said on Friday.

NMDC follow-on offer to open March 10

The follow-on public offering (FPO) of state-run mining firm NMDC (National Mineral Development Corporation) will open for subscription on March 10 and close March 12.

A 5% discount to the offer price determined pursuant to the completion of the book-building process shall be offered to retail individual bidders and eligible employees.

The largest iron ore producer by volume in India (according to the Federation of Indian Mineral Industries), is entering the capital market with a follow-on public offer of 332,243,200 equity shares of face value Re 1 each through an offer for sale by the President of India, acting through the Ministry of Steel (MoS), Government of India for cash at prices determined through the alternate book building method.

The offer comprises a net offer to the public of 330,500,000 equity shares and a reservation of 1,743,200 equity shares for purchase by eligible employees at a discount of 5% to the floor price. The offer shall constitute 8.38% of the post offer paid-up equity share capital of the company. The government will hold 90% stake in the company post issue.

The company shall not receive any proceeds of this offer and all the proceeds shall be received by the selling shareholder - the Government of India, which will dilute 8.38% stake in the company.

For the nine-month period ended December 2009, it has reported a profit after tax of Rs 2,381.51 crore on a total income of Rs 4,882.54 crore.

The book running lead managers to the issue are UBS Securities India Private Limited, Citigroup Global Markets India Private Limited, Edelweiss Capital Limited, Kotak Mahindra Capital Company Limited, Morgan Stanley India Company Private Limited and RBS Equities (India) Limited (formerly known as ABN Amro Asia Equities (India) Limited).