RSS FEED IDEMS: Investors Chronicle
- RPL, Emaar MGF IPOs may drive next phase of market rally
THE stock market rally has left investors gasping for breath. When the market is in an uncertain territory like this, opinion always gets sharply divided on whether the new levels are sustainable or not. With the secondary market in a quandary, the primary market may just be the one to show the way.
The reason being some large, and significant public issues like Reliance Power, Emaar MGF, Edelweiss and Wockhardt Hospital are ready to enter the market. If they get lapped up by investors without denting the secondary market, then the market may just get the vote of confidence they are looking.
Among the lot, Reliance Power and Emaar are the two most important issues. In terms of size, they are the largest issues among the 60 or so draft red herring prospectus (DRHPs) filed with Sebi currently. Reliance Power aims to raise a little over Rs 6,000 crore and Emaar MGF is planning to raise Rs 5,000-6,000 crore.
These issues could see the sectors they represent — power and real estate — emerge as the drivers of the next phase of the market rally. Both these issues are looking at ambitious valuations. Reliance Power is reportedly looking at a valuation of around Rs 90,000 crore, while Emaar is looking at a Rs 50,000 crore to 60,000 crore market cap.
Reliance Power issue, in particular, is important. This issue, like the Reliance Petroleum issue in April 2006, once again asks investors to put their faith on the Reliance name. Reliance Petro IPO had raised Rs 2,700 crore from retail investors for a greenfield Rs 27,000-crore refinery project which is likely to go on stream in 2009. Such was the frenzy that the issue was oversubscribed around 68 times.
Investors haven’t been disappointed. The share price is now around Rs 160, up 160% from the IPO price. Reliance Petro’s market cap is over Rs 70,000 crore now.
Reliance Power is attempting something even more ambitious. It plans to raise over Rs 6,000 crore for 12 power projects, aggregating 24,000 MW. Considering Rs 4 crore as expense per mega watt as a thumb rule, Reliance Power is talking of implementing around Rs 100,000 crore worth of projects almost simultaneously. No company in the history of India Inc has perhaps attempted something of this magnitude.
How this issue performs on the primary market will no doubt be important. Media reported last week that the issue is already trading at almost 50% premium in the grey market. Successful closing of this issue can have tremendous spinoffs for the power sector, making it one of the most important sectors for the market.
The power sector already has NTPC, which at a valuation of $45 billion, is the fourth mostvaluable scrip on the market. With Reliance Power ($23 billion expected), Power Grid ($10.5 billion), Reliance Energy ($8.2 billion), Tata Power ($5 billion) and Power Finance ($6 billion), there are a fair number of large-caps here. Also, if you count power equipment companies like Bhel, Suzlon, ABB, Siemens, Crompton and the numerous transformer and switch gear companies, power sector could be set for a strong rally.
This is also because Reliance Power issue is asking investors to alter valuation numbers of power sector companies. Power sector could do what real estate sector did a few months ago based on Reliance Power’s market performance.
Remember how a wave starts? One company leads a valuation charge that defies explanation, analysts find a new metric to explain this, all other companies in the sector work to look good on that metric. When valuations of the likes of Unitech, the Ansal companies, BF Utilities and other such real estate companies started rocketing, analysts came up with ‘land bank’ as an explanation of why these valuations were justified. So all real estate companies have frantically worked to build land bank. The same could happen in the power sector. If Reliance Power gets this valuation, there could be a spurt in companies wanting to build a bank of power projects. 
Mon, 08 Oct 2007 14:23:00 +0000
- Offshore support companies are all ready to throw their weight behind the hectic activity going on in the petroleum E & P space
NOTWITHSTANDING THE bull mania on the bourses investors seem to have overlooked offshore support services sector in ’07, leading to its relative underperformance vis-à-vis benchmark indices. Ironically, this has happened at a time when oil prices are quoting at an all-time high, which bodes well for exploration & production (E&P) activity worldwide. The E&P activity in India too has picked up with six rounds of NELPs already over and the seventh expected in the near future. With heightened petroleum exploration activity in India as well as the world over, the demand for services and assets that offshore support companies provide has grown tremendously. And the bulging capex plans of E&P majors like ONGC and RIL ensure that the demand for offshore support services will remain strong in the future as well.
However, most of the companies supporting these petroleum heavyweights in their offshore exploration activities have grossly underperformed the benchmarks in ’07. And this is despite their outperformance during ’05 and ’06. While the fundamentals of the industry have not weakened, the stock performance of companies like Dolphin Offshore, Garware Offshore and Seamec has taken a hit in ’07. Even the largest private sector fleet owner Great Offshore has underperformed since it got listed in December ’06.
One of the main reasons behind this lull is that the industry is currently passing through an investment phase and all the companies are awaiting deliveries of a number of vessels over the next 12 months. Industry leader Aban Offshore has been an exception mainly because it has doubled its asset base through acquisition of Sinvest via a leveraged buyout.
Since it spun-off last year, Great Offshore’s fleet has been undergoing a phase of heavy dry-docking and upgradation, with the company having invested over Rs 130 crore till date on the exercise. The dry-docking and upgradation work meant heavy expenditure on the one hand and loss of revenues on the other, as the vessels remained idle. However, with this phase getting over the company is likely to perform better in the coming quarters. Making The Right Moves
BOTHits rigs as well as the MSV (multi-support vessel), which was commissioned recently, will be on charter from Q3 FY08 onwards. The company has ordered for a drilling rig – for which it has already secured Rs 1,000 crore contract for fiveyear duration – and an MSV to be delivered in FY10. The company has also raised nearly Rs 320 crore over last one month and is believed to be planning some acquisition.
Seamec has also augmented its fleet of three MSVs by buying one diving support vessel. Despite substantial delay in the deployment of the new vessel, the company has performed well in the past couple of quarters. The new vessel is likely to commence operations by the October ’07, adding substantially to the company’s revenues, which is trading at a significantly lower P/E of 10.
Dolphin Offshore’s stock has also suffered due to unbilled expenditure on a couple of contracts and higher dry-docking expenditure. Over the past few quarters, it has moved up from being a sub-contractor to a main contractor and won several big-ticket contracts. Its current unexecuted order book stands at Rs 230 crore, which is more than its revenues for FY07. Two workboats and one construction barge are scheduled to join its fleet over the next 12 months. It is aiming for a sustainable 40% growth over the next three years.
Garware Offshore, which gained over 1,400% in market capitalisation after its dream run in ’05 and ’06, has posted a 27% fall during ’07. This was mainly because the company had to dilute equity to finance the acquisition of vessels. It presently owns a fleet of 3 PSVs (platform support vessels) and 4 AHTs (anchor handling tugs) and will add two AHTs and two PSVs over the next 15 months to its fleet. It has also obtained the exclusive rights from a Norwegian company to market its ships and ship designs in India. It aims at a turnover of Rs 90 crore with profits of Rs 30 crore for ’07.
Considering India’s dependence on imported crude oil, the efforts in E&P will continue unabated even in the event of a global economic slowdown. Also, the government will award around 60 oil blocks under the seventh round of NELP by end’07. These new exploration activities, along with routine maintenance and repairs, replacement of old assets and redevelopment of ageing oil fields offer excellent growth opportunities for the domestic players in the offshore support industry. Investors with investment horizon of 6 to 12 months can consider investing in these companies.
Mon, 08 Oct 2007 14:09:00 +0000
- Reliance Power IPO DRHP
Will it, won’t it? The curiosity of the media is finally vetted nd the IPO details of Reliance Power have come out of the wraps. The much anticipated, probably the largest ever IPO to hit the Indian capital markets in recent times, is out for all to scrutinise and assess.
The company having filed its Draft Red Herring Prospectus (DRHP) with SEBI on 03-10-07, all the speculations have come to rest. The terms of the issue, size, object, project, means of finance, promoters contribution etc. are as under:-
Issue Size 130 crore equity shares of Rs.2 each, by 100% book built issue. This size is 11.5% of the total equity of 1,130 crore equity shares.
Promoters’ Contribution – 16 crore equity shares of Rs.2 each to be subscribed by the Promoters at the same price as being offered to the public. Reliance Energy Ltd. (RIL) and AAA Projects Ventures Pvt. Ltd. (AAA) being the joint promoters would be subscribing 8 crore equity shares of Rs.2, each.
Net Public Issue – 114 crore equity shares of Rs.2 each, shall be offered to the public, by a book-built issue.
Promoters – REL and AAA are the promoters of the company.
Post Issue Equity – Present equity comprising of 1,000 crore equity shares of Rs.2 each, being Rs.2,000 crores which shall rise to 1,130 crore equity shares, of Rs.2 each, for Rs.2,260 crores.
Promoters Stake – REL shall be holding 508 crore equity shares of Rs.2 each,being 44.95%, while AAA shall be holding 508 crore equity shares of Rs.2 each, being 44.95%. Remaining 114 crore shares of Rs.2 each being 10.10% shall be held with the public.
BRLM – Book Running Lead Managers to the issue are Kotak, UBS, ABN Amro, Deutsche Equities, Enam, ICICI, JM and JP Morgan while Co-BRLM are Macquarie Advisory and SBI Capital.
Listing – NSE and BSE.
Boards of Directors – Anil Ambani, S. L. Rao, J. L Bajaj, Dr. V. K. Chaturvedi and Dr. Yogendra Narain. Expect for Anil Ambani, all are Independent Director and all were appointed on a single day viz. 30-09-07.
Financials – FY 07 – Total Income Rs.2.25 crores, PBT Rs.54 lakhs, and PAT Rs.16 lakh. For six months ending 30-09-07 total income was Rs.3.23 crores, PBT Rs.1.78 crores and PAT Rs.1.18 crores. Paid-up equity as on 30-09-07 Rs.2,000 crores and net worth Rs.2,006.91 crores. Average cost per share to promoters – Rs.2 (having issued entire equity at par) and NAV on 30-09-07 per share is Rs.2.01.
Cost of Project – The company is implementing following power projects: -
Sl.No
Project
Capacity
Feedstock
Public Issue
Cost
Completion
Rs./crores
Rs./crores
1
Rosa Phase I
600 MW
Coal
436.92
2,702
Mar. 10
2
Rosa Phase II
600 MW
Coal
491.95
2,460
Sept. 10
3
Butibori
300 MW
Coal
272.22
1,405
Jun. 10
4
Sasan
3960 MW
Coal
3630.12
18,342
Apr. 16
5
Shahapur
1200 MW
Coal
906.66
4,800
Dec. 11
6
Urthing Sobla
400 MW
Hydro
410.44
2,080
Mar. 14
7,060 MW
6148.31
31,789
Balance of Rs.25,431 crores shall be mobilized by way of term loan with Debt Equity ratio of 4 : 1. PPA entered for 4,560 MW for Project 1 and 4, for 25 years.
Projects in Pipeline –
1) 7,480 MW Gas based power project at Dadri
2) 3,960 MW Coal based at M.P.
3) 2,800 MW Combined Cycle Gas Fired at Shahapur
4) 1,000 MW Hydro at Siyom.
5) 1,200 MW Hydro Kalai II
6) 700 MW Hydro at Tato
17,140 MW
Cost of Project & Means of Finance for these projects, have not yet been worked out.
Summary of Power Projects-
6 Coal based – 10,620 MW
2 Gas based – 10,280 MW
4 Hydro based – 3,230 MW
12 Total 24,200 MW
Western India 12,220 MW
Northern India 9,080 MW
North Eastern Region 2.900 MW
Total 24,200 MW
Total cost of 12 projects are Rs.95,591 crores, which is to be financed by debt of Rs.76,473 crores in debt equity ratio of 4 : 1
Payment Facility – There are two payment method. Method 1 allows 25% on application and remaining 75% on Due Date and available to Retail and Non-Institutional category. Method 2 asks for full payment on application, available to Retail and Non-Institutional. QIB category needs to pay 10% only with application.
Background of Company – Incorporated on 17-01-95 as Bawana Power P. Ltd., name changed to Reliance Delhi Power P. Ltd. to Reliance E. Gen P. Ltd. to Reliance Energy Generation P. Ltd. to Reliance Energy Generation Ltd. to Reliance Power Ltd. with effect from 4th July 07.
Expected Band – As the company has estimated a fund requirement of Rs.6,148 crores plus fund for general corporate purposes and issue expenses, the same is estimated at about Rs.7,000 crores. Hence, price band could be between Rs.50 to Rs.55 per share, by which Rs.6,500 crores to Rs.7,150 crores can get mobilised, which is less than US $ 2 Billion.
Grey Market Premium – Grey Market Premium of Rs.32 to Rs.33 per share, over and above the issue price. Application premium is Rs.4000 per application of Rs.1 lakh.
Expected Time of IPO- Post Diwali, around 15th November, Labhpanchmi Day, which is considered most auspicious day, especially in Gujarat.
Implications – Probably the fastest filed DRHP where –
1) 8 BRLM are working.
2) DRHP filed on 03-10-07 with SEBI, with accounts incorporated upto 30-09-07 and directors appointed on 30-09-07.
3) Reliance Public Utility Pvt. Ltd. having merged with the company w.e.f. 30-09-07.
4) Face value of equity shares sub-divided from Rs.10 to Rs.2, w.e.f. 30-09-07.
5) The company must not have received confirmation for filling of various forms with Registrar of Companies viz. Form 32, Form 2, Form 23 etc.
6) 2nd October, being national holiday, otherwise the company would have filed DRHP on 02-10-07 itself. This must probably be a world record of having filed DRHP for raising over US $ 1.5 billion in just 1 working day.
7) This must be a costliest issue by any company, for its greenfield projects. Also, must be only issue where promoters stake of over 98% (1,000 crore shares out of 1,016 crores shares) has been issued at par.
8) Probably the only company having formed on the basis of the projects of existing company, which has stake of less than 45%, and despite that, all the projects which are now being executed, have been originated or conceived by REL.
9) Promoters in their individual capacity, acquiring about 45% stake of new company, virtually at par.
Fri, 05 Oct 2007 09:57:00 +0000
- Koutons Retail India IPO Allotment,Consolidated Construction Consortium IPO Allotment, Grey Market Premiums of IPO
Allotment Status of Koutons Retail and Consolidated Construction Consortium is available at Karvy website
Grey Market Premiums
Grey Market premiums on Thursday
Koutons Retail Rs 85-87,
Reliance Power Rs 32-33,
Dhanus Technologies Rs 72-74,
Consolidated Construction Rs 185-190,
Supreme Infra Rs 60-62,
Saamya Biotech Rs 6-7
Maytas Infra Rs.150-152.
Fri, 05 Oct 2007 09:48:00 +0000
- PowerGrid Listing and Power Grid Target
Powergrid Corporation is likely to list at Rs 85 on Friday. Buying is advised at Rs 82, while allottees are advised to hold the stock for 2-3 months. It may go upto 99 or 115.
It can become weak around closing hrs due to F&O and in coming days due to F&O limit hit so do time it right.
Thu, 04 Oct 2007 16:35:00 +0000
- REL Power IPO and Comparision with NTPC
Values firm at around Rs 61,000 crore
Vishal Chhabria & Satish John
MUMBAI: Anil Ambani's Reliance Power will offer 10.1% stake - or 114 crore shares - to the public through an initial public offering (IPO) that is billed to raise about Rs 7,000 crore, making it the second-largest IPO in India.
The record for the largest is held by realty giant DLF, which had raised Rs 9,187 crore.
The promoters themselves will subscribe to 1.4%, or 16 crore, shares of the issue.
According to DNA Money estimates, this sale will be tantamount to a valuation of Rs 61,000 crore for Reliance Power.
Roughly Rs 7,000 crore is being raised through 130 crore shares, which translates into Rs 54 per Reliance Power share.
This means, Reliance Energy's holding of 508 crore shares in Reliance Power, post issue, will be valued at Rs 27,432 crore.
Considering Reliance Energy's diluted equity of 23 crore shares, the value of its holding in Reliance Power works out to Rs 1,183 per share. Shirish Rane and Bhoomika Nair of brokerage house SSKI had, in a report on October 1, estimated the value of Reliance Energy without Reliance Power at Rs 869 per share. Combining the two takes Reliance Energy's valuation soaring to Rs 2,052 per share. The share closed around Rs 1,450 on Wednesday, up 7.5%.
Reliance Power aims to raise a minimum of Rs 6,148.31 crore through the IPO. Given that some more funds will be required to meet general corporate and IPO expenses, the total IPO proceeds should hence work out to around Rs 7,000 crore.
Add to that the Rs 76,500 crore that will be required (over few years) in the form of debt to fund the 12 projects, the enterprise value of Reliance Power works out to Rs 1,37,500 crore.
Rel Power lines up Rs 7,000 crore IPO
The Anil Ambani group intends Reliance Power to be its primary vehicle for investments in the power generation sector in the future.
It is planned to generate generate 24,200 mw through 12 projects, which the company touted in the prospectus as one of the "largest portfolios of power generation assets under development."
In a draft red herring prospectus filed with Sebi, Reliance Power, owned equally by Reliance Energy and AAA Project (a holding company of Anil Ambani's R-ADAG), will have, post-IPO, a holding equity pattern of 44.9% each between Reliance
Energy and AAA Project, with the balance 10.1% held by the public.
The net issue to the public in the IPO would be 114 crore shares of Rs 2 each.
The two promoters have committed to subscribe about 8 crore shares each (total 16 crore shares) in the IPO, by way of promoters' contribution at the IPO price.
In June 2007, AAA Project was allotted about 50 crore shares at Rs 10 each (at par).
Each share of Reliance Power (of Rs 10 paid-up) was subsequently sub-divided into five shares of Rs 2 each in September.
Reliance Power has the largest power portfolio of power generation projects under development in the country.
This includes the 3,960 mw coal-fired ultra-mega power project in Sasan, and the 7,480 mw gaas-fired project at Dadri in Uttar Pradesh, which is billed as one of the largest gas fired project in a single location.
According to the prospectus, the company will have to raise Rs 25,431.20 crore, in addition to the proposed IPO, to fund the balance of costs for the identified projects. The draft also said the company has mandated bankers to raise about $6 billion in syndicated loans on secured basis for identified projects.
It further said about 20% of the projects will be funded through contributions from Reliance Power and the balance 80% through third-party debt.
For Reliance ADA Group, this will be the first public offering since the group was formed two years ago when the Reliance group was split between Mukesh Ambani, who controls Reliance Industries, and brother Anil.
The issue will be managed by UBS, ABN Amro, JPMorgan, Deutsche Equities, Enam securities and Kotak Mahindra Capital, while Macquarie India and SBI Capital Markets would be co-managers, the statement said.
Rel Power vs NTPC
Comparing Reliance Power with NTPC, India's largest and most-efficient power generating company, makes for interesting reading.
NTPC has about 28,000 mw of power generating capacity already operational (besides, coal blocks, etc for future projects), and is currently valued at Rs 206,000 crore (market capitalisation of Rs 179,000 crore plus debt of Rs 27,019 crore as on March 30, 2007).
Importantly, NTPC is setting up projects with a combined capacity of 22,600 mw (13,360 mw already under execution) to be operational by 2012, at a time when Reliance Power's power capacities should hopefully have become operational.
What's also interesting is that NTPC currently generates a cash profit (net profit plus depreciation) of over Rs 9,000 crore annually.
The company, in its 2006-07 annual report said that all the planned capacity addition programs shall be financed with a debt to equity ratio of 70:30 and that it believes that internal accruals would be sufficient to finance the equity portion of the investments.
Assuming an approx total cost of Rs 88,000 crore at Rs 4 per mw, NTPC's equity contribution would be under Rs 27,000 crore, which should not be an issue given the cash profits and also, current low debt:equity of 0.50 times.
By then (2012), NTPC would be boasting of a total capacity of over 50,000 mw, more than double of Reliance Power.
So is it a case of Reliance Power asking for too much or NTPC being grossly undervalued?
Thu, 04 Oct 2007 10:24:00 +0000
- Q2FY08 pre results estimates for Infosys, Satyam, TCS, HCL and Wipro
HCL Tech Q2 net profit seen down at Rs 265.7 cr
Religare has come out with an earnings estimates of the leading IT comapnies for the second quarter of current financial year.
In the Q2 FY08, HCL Tech is expected to report net sales of Rs 1806.6 crore up 12.1% on QoQ basis. During the same quarter, its net profit is seen down 43.1% at Rs 265.7 crore, QoQ.
Satyam Q2 net profit seen down at Rs 358.9 cr
Religare has come out with an earnings estimates of the leading IT comapnies for the second quarter of current financial year.
In the Q2 FY08, Satyam is expected to report net sales of Rs 1956.2 crore up 6.9% on QoQ basis. During the same quarter, its net profit is seen down 5.1% at Rs 358.9 crore, QoQ.
Wipro's Q2 net profit seen flat at Rs 725.6 cr
Religare has come out with an earnings estimates of the leading IT comapnies for the second quarter of current financial year.
In the Q2 FY08, Wipro is expected to report net sales of Rs 4610.6 crore up 7.8% on QoQ basis. During the same quarter, its net profit is seen flat at Rs 725.6 crore, QoQ.
TCS Q2 net profit seen up 6.3% at Rs 1260.1 cr
Religare has come out with an earnings estimates of the leading IT comapnies for the second quarter of current financial year.
In the Q2 FY08, TCS is expected to report net sales of Rs 5635.5 crore up 8.3% on QoQ basis. During the same quarter, its net profit is seen up 6.3% at Rs 1260.1 crore, QoQ.
Infosys Q2 PAT seen up 3.2% at Rs 1065.7 cr
Religare has come out with an earnings estimates of the leading IT comapnies for the second quarter of current financial year.
In Q2 FY08, the IT bellwether Infosys is expected to report net sales of Rs 3994.5 crore up 5.9% on QoQ basis. During the same quarter, its net profit is seen up 3.2% at Rs 1065.7 crore, QoQ.
Wed, 03 Oct 2007 16:59:00 +0000
- RIIL, RIL, RCOM, GMR INFRA, Grey Market Premium
GMR Infrastructure may soon finalise developers for its 45-acre property at New Delhi Airport which could fetch Rs 3000 crore to the company. The company would still be left with 200 acres land at Delhi Airport. This news can see big run up in the stock price of Rs 220 levels.
RIIL (reliance infrastructure) as share has potential to touch Rs 2000 mark by Diwali as indicated earlier. Don’t dare to go for profit booking as long term prospects are extremely bullish.
Grey Market premiums on Wednesday at 11.30 AM were: Koutons Retail Rs 85-87, Power Grid Rs 32.50-33 , Dhanus Technologies Rs 72-74, Consolidated Construction Rs 185-190, Supreme Infra Rs 60-62, Saamya Biotech Rs 6-7 and Maytas Infra Rs.150-152.
Reliance Communications would witness momentum rise in the coming weeks as Rs 100 rise in share price would make its promoter richer by US $ 3.5 billion which is a sizeable amount in valuation race. Share price is tipped to touch Rs 750 mark by Diwali.
Market was agog with rumours that RIL may announce bonus shortly. Insiders rule out bonus but say that stock split may be on the cards in the near future.
Wed, 03 Oct 2007 09:00:00 +0000
- FIs may acquire stake in Tata Tea gardens
International companies in the non-tea space are likely to pick up stake in Tata Tea's hived off Amalgamated Plantations, formerly North India Plantation Operations.
"After the court approves the demerger, the company will have to get response from the workers," L Krishna Kumar, group chief financial officer (CFO), Tetley said. Depending on workers' participation, the shareholding of the Tata group and international companies would be determined.
The participation of the international companies could be in the range of 15 to 20% while other stakeholders in the venture--IFC, IL&FS, and the Tata group—could hold 20% each. However, the shareholding pattern is subject to workers' participation.
"The international investors would have expertise in the non-tea business. Tata Tea is already running non-tea pilot projects in Assam," Kumar said.
Krishna Kumar said, fisheries, jatropha, fruits and vegetables could be possible revenue streams but declined to indicate revenues that could be generated from the non-tea businesses.
It was in keeping with the diversification plans that the non-tea companies could participate in Amalgamated Plantations.
Hardeep Singh, who was chairman of Cargill India, is now the chairman designate of Amalgamated Plantations. Cargill happens to be an international provider of food, agricultural and risk management products and services.
The scheme of arrangement and reconstruction for transfer of North India plantations business to Amalgamated Plantations has already been approved by shareholders. The transfer would be effective on receipt of final approval from the high court.
Ken Pringle, executive vice chairman and chief executive officer, Tetley and on the board of Tata Tea said plantations resulted in social obligations.
Earlier, Tata Tea had hived off its South India Plantation Operations as an employees' cooperative, Kanan Devan Hills Plantations.
The restructuring was part of Tata Tea's move to becoming a branded beverage company.
Pringle said the company would grow the Good Earth brand. In 2005, Tetley US Holdings acquired US-based FMALI Herb and Good Earth Corporation.
Good Earth had ventured into organic tea and could even move beyond the beverage space, Pringle said."We have to see how far we can stretch the brand," he said.
Tue, 02 Oct 2007 17:46:00 +0000
- FirstSource losses CitiGroup BPO Deal against Genpact
MUMBAI/BANGALORE: India’ largest BPO company and the NYSE-listed Genpact is said to have won the race to buy out Citi group’s call centres in India. The deal was clinched after a week of final negotiations for around $700 million, according to industry sources.
"No comment and (there is) nothing accurate in the rumours at all," said Genpact president and CEO Pramod Bhasin, who, along with senior executives, is stationed in New York to stitch up the deal.
The final leg of negotiations had just two suitors — Genpact and Mumbai-based Firstsource — the only large third party BPOs who specialise in banking and insurance processes. Though both companies are said to have quoted around $700 million each for the buyout, Genpact is said to have won the deal on its ability to raise the required finances easily.
Tue, 02 Oct 2007 17:35:00 +0000
- Tata Steel to raise prices
Tata Steel Ltd., which acquired Corus Group Plc for $12 billion in January, will raise prices for the second straight month as construction and automobile companies in India increase orders to meet demand.
Prices of so-called long products for immediate delivery will be raised by as much as 2 percent, or 600 rupees ($15) a ton, from tomorrow, Deputy Managing Director T. Mukherjee said in a telephone interview today from the eastern Indian city of Jamshedpur, where Tata's factory is located. Tata is also scouting for iron ore and coal mines in Brazil, Australia, Canada and several African countries, he said.
Indian steelmakers are raising prices as demand increases in China and India, the world's fastest-growing major economies. Tata's decision matched yesterday's increase by Steel Authority of India Ltd., the nation's biggest state-run steelmaker.
The price of so-called rebar, a benchmark long product, will increase to about 26,600 rupees in the immediate delivery market, Mukherjee said. Tata, one of the lowest-cost steelmakers in India, faces competition for raw materials as it expands overseas and prices of iron ore and coal increase.
``Securing supplies is key to Tata Steel's global plans as its own mines will mostly be used to meet its requirement in India,'' said Sanjay Makhija, vice president at Mumbai-based Fortune Financial Services.
Tata Steel agreed to buy a stake in a Mozambique coal mine in August for $86 million. The coal will be used to produce steel at its plants in Europe, Mukherjee said.
``We are looking for iron ore mines for our European operations and depending on the location of the coal mine, we will decide whether to use it for operations in India or Europe,'' he said.
Tata Steel and Corus combined produce about 25 million tons a year. Capacity may more than double to 56 million tons by 2015 after the three new plants planned in the eastern Indian states of Orissa, Jharkhand and Chattisgarh start production, Chairman Ratan Tata said in a letter to shareholders in July.
Tue, 02 Oct 2007 17:22:00 +0000
- IFCI Bids expected around Rs 125 with Goldman Consortium leading the race
Consortiums led by Wilbur L Ross and Shinsei Bank are seemingly the front-runners among 10 bidders for a 26 per cent stake in IFCI, the country's oldest development financial institution.
According to highly placed sources, the top management of IFCI is of the view that roping a consortium partners would help the organisation in retaining its own identity, which is also the objective of this exercise.
"We do not want investors only eyeing lucrative financial assets and in the case of the consortium partners, individual members of the consortium would not have an active role to play," said a senior IFCI official.
The consortium led by WL Ross includes Standard Chartered Bank, Goldman Sachs and HDFC Ltd. The rival consortium led by Japan's Shinsei Bank includes US-based JC Flowers and state-controlled Punjab National Bank.
Sterlite and Morgan Stanley have also joined together to bid. Among the individual bidders are IDFC, GE Capital, Newbridge, Netixis and Blackstone Capital Partners still in the fray.
At a high-level meeting on Monday, it was decided to reject the bids of Cargill Finance and Kotak Mahindra, corporate sources said. "All the bidders left in the fray will be informed by the end of this week and they will be called for presentations by October-end," a source said.
Goldman Sachs is apparently very aggressive on IFCI after it acquired five per cent stake in NSE in January this year.
They have realised the inherent strength of IFCI and they have already acquired 3.2 per cent stake from the open market.
Since some of the overseas bidders are looking at an entry point through IFCI, the battle is expected to intensify further.
Sources close to the deal said the deal would cost the successful bidder over Rs 4,500 crore. The bids are expected to be over Rs 125 per share. At this price, the successful bidder will have to fork out over Rs 2,800 crore for 26 per cent and will have to set aside additional Rs 1,600 crore for the open offer of 20 per cent under SEBI's takeover norms.
Tue, 02 Oct 2007 17:20:00 +0000
- Punj Lloyd to leverage on alliances
Punj Lloyd is working overtime to ensure that it meets its expansion plans and keep investors happy. Its looking at global giant GE to partner with in a strategic alliance to build more value for investors.
If things work out between them then Punj Lloyd will be GE's preferred construction company, while GE will get them bigger contracts and global expertise.
“We are talking to GE and the moment there is something to announce, we'll tell you about it,” said Luv Chabbra, Director, Punj Lloyd.
Meanwhile, Punj Lloyd is going ahead with their big plans in other sectors of infrastructure. It has bought 50 per cent stake in a real estate company Ramprastha Group. It has bought 25 per cent stake in Pipavav Shipyard. Pipavav is likely to go for an IPO soon and it has applied for a licence to make defence equipment.
An alliance with GE would give Punj Lloyd help expand faster and get bigger contracts. They would also get access to a world-class engineering company. GE would have strategic alliance in the construction sector, which is struggling to keep up with the increasing demand.
Punj Lloyd is also confident about its capability to get into the nuclear energy sector. It says that its UK wing SembCorp has the right expertise for this sector.
“Nuclear energy would emerge as one of the biggest sector in the future and we see ourselves entering this sector. It all depends on the Indo-US nuclear deal,” said Chabbra.
Indo-US nuclear deal or not, Punj Lloyd will continue to grow as the EPC sector grows at a scorching pace.
Mon, 01 Oct 2007 20:16:00 +0000
- GMR Infrastructure wins Istanbul 2nd airport bid
A consortium of Malaysia Airports Holdings, India's GMR Infrastructure and Turkey's Limak won the rights to Istanbul's second airport on Monday with a 1.9 billion-euro bid.
The winning bid -which does not include 18 percent value added tax -beat offers from four other consortiums of foreign and local players in a tender lasting more than 12 hours.
The consortium will build a new international terminal at the Sabiha Gokcen Airport on Istanbul's Asian side and run the airport for 20 years. Sources said that the design of the project is previously announced to tender participants. It will expand annual capacity by 10 million passengers which is currently 3.5 million.
"Istanbul needed a second airport and we will serve that need,'' said Limak's Nihat Ozdemir.
Mon, 01 Oct 2007 20:13:00 +0000
- Dhanus Technologies IPO - How to withdraw application?
Send the signed application as stated below and courier/speed post to following address
Cameo Corporate Services Ltd
Unit: Dhanus IPO
No.1 Club House Road
Subramanian Building Vth Floor
Chennai-600 002.
Alternatively, the letter may also be sent to cameo Dhanus through fax to 044-28460129 or you can also send the scanned copy of the same through mail.
Emails- cameo@cameoindia.com ; dhanus@cameoindia.com ; ipo@dhanus.net
Please note that the last date for receipt for withdrawal of application is 06.10.2007.
Mechanism as stated above is by cameoindia. therefore, Fax is best alternative, scanned copy looks second best option as there is no guarantee of speed post/courier reaching in time.
Letter Format
Sub: Withdrawal of application number xxx from Dhanus Technologies IPO
Dear Sir,
We are in receipt of your letter dated 24th September 2007. In view of the developments mentioned in the letter, we are no longer interested in the Dhanus IPO. We request you to treat our application as withdrawn and refund the application amount to us at your earliest. The details of our application are as follows:
Name of applicant(s): xxxxx
Address: xxxxx
Application Number: xxxx
Number of shares bid for: 160
Amount Paid: 47200
Cheque number and bank/branch on which drawn:
(Applied online through HDFCSECURITIES/ICICIDIRECT. FOLLOWING DETAILS ARE ENCLOSED)
BROKER REF NO: xxxx
DP Id: INxxxx
Client Id: xxxx
EXCH ORDER NO AS PER HDFCSEC/ICICIDIRECT ORDER BOOK:- xxxx
Thanking you,
Yours sincerely,
XXX
MUST SIGN
Sat, 29 Sep 2007 17:39:00 +0000
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