1.Birla Cotsyn (India) Ltd.
Opening Date : 30/06/2008.
Closing Date : 04/07/2008.
Monday, June 30, 2008
Birla Cotsyn India Ipo Opens For Subscription - June 30, 2008
Birla Cotsyn India, part of Yash Birla Group is open for subscription from today. The issue will close on July 04, 2008. The IPO is of Rs144.18 crore and the price band for the issue has fixed at Rs15 to Rs18 per equity share.
The proceeds from this issue will be utilized for setting up a integrated textile unit and a garment manufacturing plant at their facilities located at Khamgaon, ghatanji and Makkapur in Maharastra.
The company is undergoing a expansion of Rs 320 crore project for setting up of weaving, processing, garmenting units. It also plans to begin retail operations with 20 stores by financial year 2010.
The book running lead managers to the IPO is Allbank Finance and Saffron Capital Advisors, SMC NEXGEN Capitals and Chartered Capital Investment are the co-book running lead managers.
The proceeds from this issue will be utilized for setting up a integrated textile unit and a garment manufacturing plant at their facilities located at Khamgaon, ghatanji and Makkapur in Maharastra.
The company is undergoing a expansion of Rs 320 crore project for setting up of weaving, processing, garmenting units. It also plans to begin retail operations with 20 stores by financial year 2010.
The book running lead managers to the IPO is Allbank Finance and Saffron Capital Advisors, SMC NEXGEN Capitals and Chartered Capital Investment are the co-book running lead managers.
Saturday, June 28, 2008
SRS Group Plans To Raise Rs 500 Crore Through IPO - June 28, 2008
CHANDIGARH: Fardiabad based SRS Group is expecting to raise Rs 500 crore through an Initial Public Offer, slated to be launched by the end of this fiscal, to partly fund its Rs 1000 crore expansion programme.
"We are hoping to mobilise Rs 500 crore from our public issue which would be launched by the end of this financial year," SRS Group Chairman Anil Jindal said, adding that the remaining Rs 500 crore would be raised through other means.
The company has not decided on how much prompters' stake would be diluted for the proposed public issue.
"Things are at the preliminary stage and at this moment I cannot say how much stake would be diluted," he said.
"Things are at the preliminary stage and at this moment I cannot say how much stake would be diluted," he said.
The company is also looking at other options to fund the project which include internal accruals, private equity and debt.
"The balance Rs 500 crore out of Rs 1000 crore is expected to be raised from internal accruals, private equity placement and bank loans," he said.
"The balance Rs 500 crore out of Rs 1000 crore is expected to be raised from internal accruals, private equity placement and bank loans," he said.
The company had announced to invest Rs 1000 crore in next three years on retail, entertainment, food and beverage segment.
The company intends to increase the number of its retail outlets, branded as 'Value Bazaar' to 100 by the end of current fiscal. Besides, it has also proposed to increase the strength of SRS fashion wear and SRS jewels to 25 and 10 respectively by 2008.
By the end of this fiscal, the company is looking to touch turnover of Rs 1000 crore from Rs 700 crore in 2007-08, he said.
Birla Cotsyn's IPO Opens Next Week - June 28, 2008
HYDERABAD: Birla Cotsyn (India) Ltd (BCIL), a Yash Birla Group company engaged in textile manufcturing, is entering the capital market with a Rs 144.18- crore initial public offering (IPO).
Proceeds from the issue would be used to fund two units that the company is setting up at its existing facilites in Maharashtra.
The company has fixed a price band of Rs 15 to Rs 18 per equity share of face value of Rs 10 each. The price band is 1.5 times of the face value and the cap price is 1.8 times of the face value.
The 100 pc book-build issue opens on June 30 and and closes on July 4.
Talking to mediapersons here today, Birla Group Finance Director P V R Murthy said said proceeds from the issue will be utilised to set up an integrated textile unit and a garment manufacturing plant.
The IPO would also fund the firm's foray into retail outlets which it plans to set up across the country, he said.
Murthy said the initial promoters of BCIL had entered in a 50:50 joint venture with the P B Bhardwaj Group.
The JV would enable both partners to combine their resources, expertise and carry on the business of manufacturing, marketing and distribution of the products.
It also aims to tap the domestic as well as international markets, he said.
Proceeds from the issue would be used to fund two units that the company is setting up at its existing facilites in Maharashtra.
The company has fixed a price band of Rs 15 to Rs 18 per equity share of face value of Rs 10 each. The price band is 1.5 times of the face value and the cap price is 1.8 times of the face value.
The 100 pc book-build issue opens on June 30 and and closes on July 4.
Talking to mediapersons here today, Birla Group Finance Director P V R Murthy said said proceeds from the issue will be utilised to set up an integrated textile unit and a garment manufacturing plant.
The IPO would also fund the firm's foray into retail outlets which it plans to set up across the country, he said.
Murthy said the initial promoters of BCIL had entered in a 50:50 joint venture with the P B Bhardwaj Group.
The JV would enable both partners to combine their resources, expertise and carry on the business of manufacturing, marketing and distribution of the products.
It also aims to tap the domestic as well as international markets, he said.
Friday, June 27, 2008
IPO Closing Today - June 27, 2008
1. Somi Conveyor Beltings Ltd.
Opening Date : 24/06/2008.
Closing Date : 27/06/2008.
Opening Date : 24/06/2008.
Closing Date : 27/06/2008.
Thursday, June 26, 2008
KSK Energy subscribed Its IPO - June 26, 2008
The IPO of KSK Energy Ventures was subscribed 1.50 times on Wednesday. The public issue of 3,46,11,000 received 5,19,68,500 bids. The qualified institutional buyers portions was subscribed 1.81 times, non institutional investors portion was subscribed 0.03 times and the retail portion of 1,03,83,300 did not received any subscription. Around 20,10,950 bids were received at the cut off price. The price band for the issue was Rs240-255 per share.
Wednesday, June 25, 2008
IPO Closing Today - June 25, 2008
1. KSK Energy Ventures Ltd.
Opening Date : 23/06/2008.
Closing Date : 25/06/2008.
Opening Date : 23/06/2008.
Closing Date : 25/06/2008.
Tuesday, June 24, 2008
IPO Opening Today - June 24, 2008
1.Somi Conveyor Beltings Ltd.
Opening Date : 24/06/2008.
Closing Date : 27/06/2008.
KSK Energy Ventures IPO Received Good Response - June24 , 2008
The IPO of KSK Energy Ventures was subscribed 0.94 times on Monady i.e the on first day of the issue. The issue received 3,26,91,925 bids against the issue of 3,46,11,000. Out of this10,975 bids were received at the cut off price. The price band for the issue is Rs240-255 per share. This issue is the 10% of the post issue share capital.
The company will be investing part of the funds in Wardha Power Company to finance the equity component of the 1800 mw coal based thermal power plant at Chattisgarh.
Monday, June 23, 2008
Lotus Eye Care Hospitals IPO Bagged Good Response - Jun 23, 2008
The IPO of Lotus Eye Care Hospitals on Friday has received bids for over 1.18 crore shares against one crore shares on offer.
The non institutional potion was subscribed 2.63 times along with the Qualified Institutional Buyers portion was subscribed 0.63 times while the Retail investors portion was fully subscribed.
The price band for the issue had been revised to Rs36-Rs38 from the earlier band of Rs38-42.
The company plans to utilize the proceeds for opening of new health care centers. It would partly finance its Rs 55-crore expansion through the proceeds of the IPO. The company would set up two primary eye care units in Bangalore and another in Chennai to focus on simple eye problems and optical sales. It also plans to open secondary eye care centre.
The non institutional potion was subscribed 2.63 times along with the Qualified Institutional Buyers portion was subscribed 0.63 times while the Retail investors portion was fully subscribed.
The price band for the issue had been revised to Rs36-Rs38 from the earlier band of Rs38-42.
The company plans to utilize the proceeds for opening of new health care centers. It would partly finance its Rs 55-crore expansion through the proceeds of the IPO. The company would set up two primary eye care units in Bangalore and another in Chennai to focus on simple eye problems and optical sales. It also plans to open secondary eye care centre.
Birla Cotsyn Entering The Capital Market - Jun 23 , 2008
Birla Cotsyn, a part of Birla Group is entering the capital market is entering the capital market with an initial public offering (IPO) of Rs144 crore through a 100% book building process. The issue will open on June 30, 2008 and will close on July 4, 2008.
According to sources, the price band for the issue is Rs15 to Rs18 per share. The book running lead managers to the IPO is Allbank Finance and Saffron Capital Advisors, SMC NEXGEN Capitals and Chartered Capital Investment are the co-book running lead managers.
The company is undergoing a expansion of Rs 320 crore project for setting up of weaving, processing, garmenting units. It also plans to begin retail operations with 20 stores by financial year 2010.
According to sources, the price band for the issue is Rs15 to Rs18 per share. The book running lead managers to the IPO is Allbank Finance and Saffron Capital Advisors, SMC NEXGEN Capitals and Chartered Capital Investment are the co-book running lead managers.
The company is undergoing a expansion of Rs 320 crore project for setting up of weaving, processing, garmenting units. It also plans to begin retail operations with 20 stores by financial year 2010.
Friday, June 20, 2008
IPO Closing Today - Jun 20 , 2008
1.Lotus Eye Care Hospital Ltd.
Opening Date : 12/6/2008.
Closing Date : 20/6/2008.
Opening Date : 12/6/2008.
Closing Date : 20/6/2008.
Thursday, June 19, 2008
Lotus Eye Care Hospital Extend Its IPO - June 19 , 2008
Lotus Eye Care Hospital has extended the closing date of the initial public offering to June 20, 2008 due to the poor response of the issue from the secondary market. The issue opened on June 12 and was scheduled to close on June 17.
The price band also revised down ward to Rs36-Rs38 per share from Rs38-42 earlier. The company despite of reducing the price band has received the poor response on Wednesday.
The issue received 61,42,800 bids out of which 23,44,950 bids were received at the cut off price. The retail portion was subscribed 0.70 times, qualified institutional buyers portion was subscribed 0.68 times, non institutional investor's portion was subscribed 0.13 times.
The IPO proceeds will be utilized to finance the expansion of existing facilities along with to establish new centers with latest technology and meet working capital requirement.
Keynote Corporate Services is the sole book running lead manager to IPO.
The price band also revised down ward to Rs36-Rs38 per share from Rs38-42 earlier. The company despite of reducing the price band has received the poor response on Wednesday.
The issue received 61,42,800 bids out of which 23,44,950 bids were received at the cut off price. The retail portion was subscribed 0.70 times, qualified institutional buyers portion was subscribed 0.68 times, non institutional investor's portion was subscribed 0.13 times.
The IPO proceeds will be utilized to finance the expansion of existing facilities along with to establish new centers with latest technology and meet working capital requirement.
Keynote Corporate Services is the sole book running lead manager to IPO.
Tuesday, June 17, 2008
IPO Closing Today - June 17 , 2008
1 .Archidply Industries Ltd.
Opening Date : 11/6/2008
Closing Date : 17/6/2008
2 .Lotus Eye Care Hospital Ltd.
Opening Date : 12/6/2008
Closing Date : 17/6/2008
Opening Date : 11/6/2008
Closing Date : 17/6/2008
2 .Lotus Eye Care Hospital Ltd.
Opening Date : 12/6/2008
Closing Date : 17/6/2008
Somi Conveyor Beltings Ltd Open Its IPO - June 17 , 2008
Somi Conveyor beltings Ltd to enter the capital markets with its initial public offering (IPO) of 62,27,860 equity shares of Rs10 each through 100% book building process. The price for the issue has been fixed at Rs35 per share. The issue will open on June 24, 2008 and will close on June 27, 2008.
Ashika Capital is the lead manager and Mondkar Computers is the registrar to the issue.
The issue consists of contribution by promoters of 14,99,286 equity shares of Rs10 each at a price of Rs35 per equity share for cash aggregating to Rs5.25 crores. The net issue to the public consists of 47,28,574 equity shares of Rs10 each at a price of Rs35 per equity share for cash aggregating to Rs16.55 crores. This also includes an allocation of atleast 10% of the net issue to the qualified institutional investors.
Somi Conveyor beltings Ltd is a manufacturer and exporter of Rubber Conveyor Belts of all grades for material handling. Conveyor belts are used in a wide variety of material transport applications such as manufacturing, food processing, and heavy industries. Belt construction and belt materials are often application-specific.
Ashika Capital is the lead manager and Mondkar Computers is the registrar to the issue.
The issue consists of contribution by promoters of 14,99,286 equity shares of Rs10 each at a price of Rs35 per equity share for cash aggregating to Rs5.25 crores. The net issue to the public consists of 47,28,574 equity shares of Rs10 each at a price of Rs35 per equity share for cash aggregating to Rs16.55 crores. This also includes an allocation of atleast 10% of the net issue to the qualified institutional investors.
Somi Conveyor beltings Ltd is a manufacturer and exporter of Rubber Conveyor Belts of all grades for material handling. Conveyor belts are used in a wide variety of material transport applications such as manufacturing, food processing, and heavy industries. Belt construction and belt materials are often application-specific.
Monday, June 16, 2008
First Winner Industries Extended Its IPO - June 16 , 2008
The initial public offering of First Winner Industries has been extended to June 17 instead of June 12.
The date was extended by the book running lead manager of the company 'Almondz Global Securities'. The price band for the issue has also been reduced to Rs115-Rs125 from Rs120-130 per share.
Till the closing of the market on Friday, the script was subscribed 0.74 times and the total number of bids received were 40,54,300 shares and 11,85,450 bids were received at the cut off price.
The date was extended by the book running lead manager of the company 'Almondz Global Securities'. The price band for the issue has also been reduced to Rs115-Rs125 from Rs120-130 per share.
Till the closing of the market on Friday, the script was subscribed 0.74 times and the total number of bids received were 40,54,300 shares and 11,85,450 bids were received at the cut off price.
Thursday, June 12, 2008
Grey Market Writing Successful Scrips For Small-Sized IPOs - June 12, 2008
MUMBAI: Small-sized public issues are increasingly becoming the punter’s favourite playing ground.
Given the small size of the issues, operators get into the act by cornering a significant chunk of shares, pumping up the price and volumes at the counter, and then dumping them on unsuspecting investors. Market watchers say that, often, the operators are in cahoots with the merchant bankers to the issue and, in some cases, with the promoters of the companies as well. The operation is usually completed in less than a month after the listing of shares.
According to market participants, trying market conditions make it difficult for most small-sized companies to raise money from genuine investors. Sensing the opportunity, promoters are approached by market operators and the entire issue management is said to be handed over to the dubious players after agreeing to terms and conditions.
Many operators are Ahmedabad-based and have the resources and network to subscribe to the entire issue, if required. They also control dummy companies overseas masquerading as institutional investors. Through various entities, the operators corner a substantial chunk of the public issue. This also ensures there is not much selling pressure on the day of listing.
Market watchers say that in some cases, the issue is subscribed by only a handful applicants. “One of the latest issue had only six qualified institutional investors, and 93% of the issue was subscribed by only nine investors. Now, you can image the control that the investors have on the listing price of the stock,” says a market analyst.
The operators also manipulate the ongoing premium on the stock price in the grey market prior to listing. In many cases, merchant bankers promise the moon to the promoters, and grey market manipulation is one of ensuring that the prices approach the promised levels.
On listing, the stock price shoots up and immediately attracts attention. Day traders jump into the fray, pushing up volumes further and improving liquidity. Some of the buyers include genuine investors who could not get the required IPO allocation and buy into the stock, and other fall prey to the rumours.
Once the share price starts shooting up, operators start spreading rumours about dizzying targets the stock is likely to touch. This triggers off a self-fulfilling prophecy with more investors jumping in for a piece of action. At the same time, there are some institutional investors who are ready to buy into these stocks, purely from a short-term perspective. Market participants say that stronger the operator, the more of number of days he can support the stock price.
In case of many new listings this year, the current ruling price of many small IPOs have gone down more than 50% from their recent highs. Part of the blame could be put on the bad market. But then, market conditions were not buoyant when the stocks listed, and yet they managed to post superb returns in the initial days.
Given the small size of the issues, operators get into the act by cornering a significant chunk of shares, pumping up the price and volumes at the counter, and then dumping them on unsuspecting investors. Market watchers say that, often, the operators are in cahoots with the merchant bankers to the issue and, in some cases, with the promoters of the companies as well. The operation is usually completed in less than a month after the listing of shares.
According to market participants, trying market conditions make it difficult for most small-sized companies to raise money from genuine investors. Sensing the opportunity, promoters are approached by market operators and the entire issue management is said to be handed over to the dubious players after agreeing to terms and conditions.
Many operators are Ahmedabad-based and have the resources and network to subscribe to the entire issue, if required. They also control dummy companies overseas masquerading as institutional investors. Through various entities, the operators corner a substantial chunk of the public issue. This also ensures there is not much selling pressure on the day of listing.
Market watchers say that in some cases, the issue is subscribed by only a handful applicants. “One of the latest issue had only six qualified institutional investors, and 93% of the issue was subscribed by only nine investors. Now, you can image the control that the investors have on the listing price of the stock,” says a market analyst.
The operators also manipulate the ongoing premium on the stock price in the grey market prior to listing. In many cases, merchant bankers promise the moon to the promoters, and grey market manipulation is one of ensuring that the prices approach the promised levels.
On listing, the stock price shoots up and immediately attracts attention. Day traders jump into the fray, pushing up volumes further and improving liquidity. Some of the buyers include genuine investors who could not get the required IPO allocation and buy into the stock, and other fall prey to the rumours.
Once the share price starts shooting up, operators start spreading rumours about dizzying targets the stock is likely to touch. This triggers off a self-fulfilling prophecy with more investors jumping in for a piece of action. At the same time, there are some institutional investors who are ready to buy into these stocks, purely from a short-term perspective. Market participants say that stronger the operator, the more of number of days he can support the stock price.
In case of many new listings this year, the current ruling price of many small IPOs have gone down more than 50% from their recent highs. Part of the blame could be put on the bad market. But then, market conditions were not buoyant when the stocks listed, and yet they managed to post superb returns in the initial days.
Wednesday, June 11, 2008
Jinshan Gold Mulls HK IPO To Fund Acquisitions - June 11, 2008
HONG KONG: Jinshan Gold Mines, a Toronto-listed company that is 42 per cent-owned by state-controlled China National Gold Corp, is considering listing shares in Hong Kong to fund an acquisition that could be worth more than $500 million, a company executive said on Wednesday.
Roger Walsh, vice president for corporate development at Jinshan Gold, told reporters that no final decision had been made on a possible listing, and that the company has no plan to delist its shares in Toronto.
He said Jinshan could receive an asset injection from China Gold, and that Jinshan's overseas investments may or may not be made jointly with China Gold.
Roger Walsh, vice president for corporate development at Jinshan Gold, told reporters that no final decision had been made on a possible listing, and that the company has no plan to delist its shares in Toronto.
He said Jinshan could receive an asset injection from China Gold, and that Jinshan's overseas investments may or may not be made jointly with China Gold.
Tuesday, June 10, 2008
Lalu’s Green Signal Puts Rites IPO Back On Track - June 10, 2008
NEW DELHI: Railways minister Lalu Prasad, known for his staunch opposition to the disinvestment process, seems to have finally succumbed to government pressure for mobilising additional resources through a stake selloff. Railway PSU Rites is set to hit the market with its IPO in a few weeks to raise resources for its expansion programme.
The proposal is to offer 25% of the paid-up capital of the company through IPO. There are also plans to divest 10% government equity in the company. A group of ministers (GoM) is expected to meet this week to finalise the price band of the offer.
The divestment proposal has been on hold for 10 months. With the elections approaching, it seems the UPA government may finally go ahead with the proposal to reduce budgetary deficit of the railways. The funds raised through the market offering would be used by Railways’ consulting arm Rites to pursue its investment plans in overseas markets and participate in the domestic road sector projects, according to sources.
While last year the government was thinking of diluting its holding in the PSU by 20%, this year, it decided to increase its offer to 25%. With this, the government stake in the company would fall to 75%. The stake would come down further with the government selling its 10% equity in the company. The proceeds may be used by the government to finance social sector projects.
As per the plan, the IPO will follow a bonus share issue of Rs 36 crore that will be undertaken after a share split where the share valued at Rs 100 will be split into 10 shares of Rs 10 each. A Cabinet note in this respect was moved last year.
Rites filed a red herring prospectus with SEBI in April 2008 to enter the capital market with an initial public offering (IPO) of 1,40,00,000 equity shares of Rs 10 each. The price is to be decided through a 100% book-building process. The company’s net worth is Rs 400 crore and has been making profit for 32 years. The issue is expected to have a high premium, according to industry analysts.
Once approved, Rites would become the second PSU under the ministry of railways to get listed. The only railway PSU to have seen divestment is Container Corporation of India (Concor). The Rites issue is significant as a 2002 proposal by the disinvestment ministry to divest a majority stakes in Rites and Ircon was stalled by the then-railways minister Nitish Kumar.
Rites requires Rs 120 crore for forthcoming projects in the overseas markets and has proposed to invest Rs 50 crore for BOT projects in the highways sector.
The proposal is to offer 25% of the paid-up capital of the company through IPO. There are also plans to divest 10% government equity in the company. A group of ministers (GoM) is expected to meet this week to finalise the price band of the offer.
The divestment proposal has been on hold for 10 months. With the elections approaching, it seems the UPA government may finally go ahead with the proposal to reduce budgetary deficit of the railways. The funds raised through the market offering would be used by Railways’ consulting arm Rites to pursue its investment plans in overseas markets and participate in the domestic road sector projects, according to sources.
While last year the government was thinking of diluting its holding in the PSU by 20%, this year, it decided to increase its offer to 25%. With this, the government stake in the company would fall to 75%. The stake would come down further with the government selling its 10% equity in the company. The proceeds may be used by the government to finance social sector projects.
As per the plan, the IPO will follow a bonus share issue of Rs 36 crore that will be undertaken after a share split where the share valued at Rs 100 will be split into 10 shares of Rs 10 each. A Cabinet note in this respect was moved last year.
Rites filed a red herring prospectus with SEBI in April 2008 to enter the capital market with an initial public offering (IPO) of 1,40,00,000 equity shares of Rs 10 each. The price is to be decided through a 100% book-building process. The company’s net worth is Rs 400 crore and has been making profit for 32 years. The issue is expected to have a high premium, according to industry analysts.
Once approved, Rites would become the second PSU under the ministry of railways to get listed. The only railway PSU to have seen divestment is Container Corporation of India (Concor). The Rites issue is significant as a 2002 proposal by the disinvestment ministry to divest a majority stakes in Rites and Ircon was stalled by the then-railways minister Nitish Kumar.
Rites requires Rs 120 crore for forthcoming projects in the overseas markets and has proposed to invest Rs 50 crore for BOT projects in the highways sector.
Monday, June 9, 2008
I-Bankers Tap Hnis For IPO Success - June 9, 2008
MUMBAI: As the going gets tough on Dalal Street, merchant bankers are pulling out all stops to ensure smooth sailing of public issues. Some are now seeking informal commitments from high net worth and institutional investors to ensure their participation.
Considering the risks involved in aggressive pricing of IPOs in uncertain markets, most of them are negotiating the issue price and are opting for reasonable pricing.
Merchant banking sources said the change in approach is a fallout of a spate of failures in the IPO market. As market turned volatile, several companies were forced to withdraw or defer their IPOs. Earlier this year, two issues from construction major Emaar MGF and Wockhardt Hospital were withdrawn for lack of investor interest.
“Merchant bankers would like to achieve some comfort before launching issues in a bad market. So, they try to get commitments from large investors about their participation. This is done, especially, when companies are desperate to raise money and cannot defer their offers,” said Prime Database managing director Prithvi Haldea.
Pricing is a key issue in such negotiations. High net worth investors or qualified institutional buyers may not honour their commitments if the price is not tempting enough, said Mr Haldea.
Four companies, Sejal Architectural Glass, First Winner Industries, Archidply Industries and Lotus Eye Care, are entering the capital market next week, with plans to raise between Rs 38 crore and Rs 97 crore at the lower limit of the price band.
The fate of these offers will also depend on the secondary market conditions. Currently, the market is going through a tough time, reeling under inflationary pressures and oil concerns. From the beginning of the year, the BSE Sensex has lost more than 4800 points. The Sensex, which touched a high of 20395.4.89 on January 1, 2008, closed at 15572.18 on Friday.
Some merchant bankers feel investors may like to subscribe to these issues, especially if the pricing is reasonable and fundamentals are sound. “Even in a bad market, new issues have been doing well because of reasonable pricing. A few recent ones have, in fact, offered decent returns to investors on listing,” said Sharad Rathi, head of investment banking at Almondz Global Securities.
Some of the market debutantes are in fact doing well on the bourses. Anu’s Laboratories and Gokul Refoils, two latest entrants, closed at Rs 265 and Rs 205, respectively on Friday, against their offer prices of Rs 210 and Rs 195. Anu’s Laboratories’ Rs 76-crore issue was oversubscribed by 8.4 times while Gokul Refoils garnered demand of 4.3 times its issue size.
Apart from the failures of Emaar and Wockhardt Hospitals, Reliance Power’s poor listing on the bourses also came as a major blow to the primary market.
While a few small-sized issues have managed to sail through in the current market, what is badly needed to boost the investor confidence is a sustained improvement in overall market conditions and successful re-entry of large-sized IPOs, says an investment banker with a foreign brokerage.
Considering the risks involved in aggressive pricing of IPOs in uncertain markets, most of them are negotiating the issue price and are opting for reasonable pricing.
Merchant banking sources said the change in approach is a fallout of a spate of failures in the IPO market. As market turned volatile, several companies were forced to withdraw or defer their IPOs. Earlier this year, two issues from construction major Emaar MGF and Wockhardt Hospital were withdrawn for lack of investor interest.
“Merchant bankers would like to achieve some comfort before launching issues in a bad market. So, they try to get commitments from large investors about their participation. This is done, especially, when companies are desperate to raise money and cannot defer their offers,” said Prime Database managing director Prithvi Haldea.
Pricing is a key issue in such negotiations. High net worth investors or qualified institutional buyers may not honour their commitments if the price is not tempting enough, said Mr Haldea.
Four companies, Sejal Architectural Glass, First Winner Industries, Archidply Industries and Lotus Eye Care, are entering the capital market next week, with plans to raise between Rs 38 crore and Rs 97 crore at the lower limit of the price band.
The fate of these offers will also depend on the secondary market conditions. Currently, the market is going through a tough time, reeling under inflationary pressures and oil concerns. From the beginning of the year, the BSE Sensex has lost more than 4800 points. The Sensex, which touched a high of 20395.4.89 on January 1, 2008, closed at 15572.18 on Friday.
Some merchant bankers feel investors may like to subscribe to these issues, especially if the pricing is reasonable and fundamentals are sound. “Even in a bad market, new issues have been doing well because of reasonable pricing. A few recent ones have, in fact, offered decent returns to investors on listing,” said Sharad Rathi, head of investment banking at Almondz Global Securities.
Some of the market debutantes are in fact doing well on the bourses. Anu’s Laboratories and Gokul Refoils, two latest entrants, closed at Rs 265 and Rs 205, respectively on Friday, against their offer prices of Rs 210 and Rs 195. Anu’s Laboratories’ Rs 76-crore issue was oversubscribed by 8.4 times while Gokul Refoils garnered demand of 4.3 times its issue size.
Apart from the failures of Emaar and Wockhardt Hospitals, Reliance Power’s poor listing on the bourses also came as a major blow to the primary market.
While a few small-sized issues have managed to sail through in the current market, what is badly needed to boost the investor confidence is a sustained improvement in overall market conditions and successful re-entry of large-sized IPOs, says an investment banker with a foreign brokerage.
Saturday, June 7, 2008
Ipos Fail The Test So Far In '08, Most Slip Below Issue Price - June 7, 2008
The Sensex seems to be under some ‘black magic’ spell and the primary market is feeling its curse. With just seven companies’ shares trading above their issue price, the primary market seems to be losing its sheen.
Of the 24 initial public offers that hit the market since the beginning of the current calendar year, less than a third of them have managed to give positive returns. Of this, only three companies have managed to give returns above 50% while the rest are hovering at an average of 15%. This seems to be in stark contrast to the triple-digit returns that retail investors are used to earning from IPOs till some time back.
Among the losers, casting and forging company Porwal Auto has been hit the hardest, trading 70% below its issue price. Metals company, Manaksia, seems to have been caught on the wrong side of the commodity cycle. It came with an issue price of Rs 160, and the stock was opened for trade at Rs 200. Currently, the stock is trading at Rs 74.
The increased emphasis on infrastructure by the government had resulted in many companies from engineering and construction space tapping the bourses for their expansion plans. About 40% of the new IPOs are either of cement or construction or capital goods companies. However, all of them have had the same fate at the altar of market.
On the better performers front, Aishwarya Telecom, the telecom equipment manufacturing company, is the one with highest returns of 110%, followed by Burnpur Cement with 55% returns. Next in line is another telecom service provider On mobile Global with 51% returns. Other companies that are at least 10% above their issue price include Titagarh Wagons, retail company Bang Overseas, and Kirti Dyes. Incidentally, the smaller issues have outperformed the bigger ones.
The total amount raised in this period was Rs 17,368 crore, of which the companies, which are still giving positive returns, contributed a small 5%. Reliance Power, the biggest initial public offer of the Indian equity market, is trading 56% below its issue price. Future Capital, from the house of the biggest retailer of India, is also 42% down from its offer price. The other bigger issues that are on an average 13% below their issue price are Rural Electrification Board, IRB Infrastructure and BGR Energy.
Of the 24 initial public offers that hit the market since the beginning of the current calendar year, less than a third of them have managed to give positive returns. Of this, only three companies have managed to give returns above 50% while the rest are hovering at an average of 15%. This seems to be in stark contrast to the triple-digit returns that retail investors are used to earning from IPOs till some time back.
Among the losers, casting and forging company Porwal Auto has been hit the hardest, trading 70% below its issue price. Metals company, Manaksia, seems to have been caught on the wrong side of the commodity cycle. It came with an issue price of Rs 160, and the stock was opened for trade at Rs 200. Currently, the stock is trading at Rs 74.
The increased emphasis on infrastructure by the government had resulted in many companies from engineering and construction space tapping the bourses for their expansion plans. About 40% of the new IPOs are either of cement or construction or capital goods companies. However, all of them have had the same fate at the altar of market.
On the better performers front, Aishwarya Telecom, the telecom equipment manufacturing company, is the one with highest returns of 110%, followed by Burnpur Cement with 55% returns. Next in line is another telecom service provider On mobile Global with 51% returns. Other companies that are at least 10% above their issue price include Titagarh Wagons, retail company Bang Overseas, and Kirti Dyes. Incidentally, the smaller issues have outperformed the bigger ones.
The total amount raised in this period was Rs 17,368 crore, of which the companies, which are still giving positive returns, contributed a small 5%. Reliance Power, the biggest initial public offer of the Indian equity market, is trading 56% below its issue price. Future Capital, from the house of the biggest retailer of India, is also 42% down from its offer price. The other bigger issues that are on an average 13% below their issue price are Rural Electrification Board, IRB Infrastructure and BGR Energy.
Friday, June 6, 2008
KSK’s IPO To Meet Rel Power’s Fate? - June 6, 2008
After the big let-down for investors by Anil Ambani's Reliance Power, a little known company, KSK Energy Ventures Ltd, with negligible experience in the power sector is planning to raise around Rs 2,000 crore through an IPO. When one of the largest industrial houses in the country could not reward its IPO subscribers with good returns post-listing, it has to be seen how this issue fares on listing.
The very first risk factor listed in the DRHP filed by KSK with Sebi says, "We have limited experience in developing and operating large power projects and managing the high level of growth we project for our business".
As against the 144 mega watt (mw) of power capacities that are operational currently, KSK has ambitious plans to set up over 9,000 mw of generation capacities over the next four years. "Of this amount, we have not entered into power purchasing agreements (PPAs) for approximately 8,500 mw of power," says the prospectus.
The total estimated project cost in eight of its under-development and planned power projects is Rs 34,900 crore. KSK will need to raise Rs 26,200 crore in debt and Rs 8,700 crore as equity to finance these projects. It is surprising how a company with last reported sales of Rs 93 crore and an estimated networth of around Rs 230 crore would raise such huge funds.
KSK's promoter director, S Kishore, told DNA Money that they are confident of raising around Rs 2,400 crore through the IPO and will be able to complete all the projects listed out in the prospectus on schedule.
Interestingly, a number of sharebrokers in the IPO savvy markets of Gujarat are not even aware of the existence of this company or its public issue plan.
"The prospectus says that the company is doubtful over raising rest of the funds for planned power projects, which is a critical point as far as investors are concerned," said Yamal Vyas, head of research at Ahmedabad-headquartered Khandwala Integrated Financial Services Ltd. He added that the company's high indebtness is of concern in a scenario of rising interest rates.
"The company would require around Rs 36,000 crore to develop 9,000 mw of power generation capacity and till now it has raised only around Rs 800 crore from private placement and through listing on the Alternative Investment Market on the London Stock Exchange," said Vyas.
"SEBI should not approve or allow public issues of companies which come out with projects with no fundamentals to back," says Nilesh Kotak, MD of Dhanvarsha Fincap Pvt Ltd. He added that Sebi should make it mandatory for every company to give peer comparison in vernacular and national level newspapers, which would give a clear idea to investors as to the valuations of the company.
Hyderabad-based KSK Energy Ventures Ltd (KSKEV), a fully-owned subsidiary of Mauritius-based KSK Energy Ltd has filed a draft-red herring prospectus (DRHP) with the Securities and Exchange Board of India (Sebi).
The company wants to tap the capital market for its 1,800 mw power project at Chhattisgarh and 130 mw hydro-electric power projects at Arunachal Pradesh, both of which are at development stage and expected to be commissioned by fiscal 2012.
On the financial side, the risk is its current debt, which is on floating basis making it highly susceptible to high interest rates. On top of it, the company intends to raise around 70% of the funds through debt, which will make it highly leveraged.
Though the company has entered into long-term fuel supply agreements with private companies, this is without securing the fuel supply for its power projects, which would not only limit its upside as far as pricing is concerned, but also make it vulnerable to rising fuel supply cost.
The very first risk factor listed in the DRHP filed by KSK with Sebi says, "We have limited experience in developing and operating large power projects and managing the high level of growth we project for our business".
As against the 144 mega watt (mw) of power capacities that are operational currently, KSK has ambitious plans to set up over 9,000 mw of generation capacities over the next four years. "Of this amount, we have not entered into power purchasing agreements (PPAs) for approximately 8,500 mw of power," says the prospectus.
The total estimated project cost in eight of its under-development and planned power projects is Rs 34,900 crore. KSK will need to raise Rs 26,200 crore in debt and Rs 8,700 crore as equity to finance these projects. It is surprising how a company with last reported sales of Rs 93 crore and an estimated networth of around Rs 230 crore would raise such huge funds.
KSK's promoter director, S Kishore, told DNA Money that they are confident of raising around Rs 2,400 crore through the IPO and will be able to complete all the projects listed out in the prospectus on schedule.
Interestingly, a number of sharebrokers in the IPO savvy markets of Gujarat are not even aware of the existence of this company or its public issue plan.
"The prospectus says that the company is doubtful over raising rest of the funds for planned power projects, which is a critical point as far as investors are concerned," said Yamal Vyas, head of research at Ahmedabad-headquartered Khandwala Integrated Financial Services Ltd. He added that the company's high indebtness is of concern in a scenario of rising interest rates.
"The company would require around Rs 36,000 crore to develop 9,000 mw of power generation capacity and till now it has raised only around Rs 800 crore from private placement and through listing on the Alternative Investment Market on the London Stock Exchange," said Vyas.
"SEBI should not approve or allow public issues of companies which come out with projects with no fundamentals to back," says Nilesh Kotak, MD of Dhanvarsha Fincap Pvt Ltd. He added that Sebi should make it mandatory for every company to give peer comparison in vernacular and national level newspapers, which would give a clear idea to investors as to the valuations of the company.
Hyderabad-based KSK Energy Ventures Ltd (KSKEV), a fully-owned subsidiary of Mauritius-based KSK Energy Ltd has filed a draft-red herring prospectus (DRHP) with the Securities and Exchange Board of India (Sebi).
The company wants to tap the capital market for its 1,800 mw power project at Chhattisgarh and 130 mw hydro-electric power projects at Arunachal Pradesh, both of which are at development stage and expected to be commissioned by fiscal 2012.
On the financial side, the risk is its current debt, which is on floating basis making it highly susceptible to high interest rates. On top of it, the company intends to raise around 70% of the funds through debt, which will make it highly leveraged.
Though the company has entered into long-term fuel supply agreements with private companies, this is without securing the fuel supply for its power projects, which would not only limit its upside as far as pricing is concerned, but also make it vulnerable to rising fuel supply cost.
Wednesday, June 4, 2008
BSNL May Call Only Govt Staff For IPO - June 4, 2008
New Delhi: Faced with stiff opposition from its employee unions over its proposed IPO, the BSNL management is considering a radical formula.
It is toying with the idea of offering shares only to government employees with a 'considerable' reservation for BSNL staff. If this proposal goes through, it will be the first such IPO in the country. The BSNL management plans to present this proposal to its striking union leaders soon.
The company is looking at a compromise formula as its plan to launch the country’s biggest IPO and raise about Rs 40,000 crore (over $10 billion) by offloading a 10% stake in the company has failed to take off so far.
Despite the public sector company’s management as well as communication minister, A Raja, holding talks with employees for several months now, the unions have not relented. In fact, BSNL employees have also threatened to go on an indefinite nation-wide strike and cripple the operations of the company, if the UPA regime goes ahead with the listing of the PSU.
“We are exploring the option of allowing only BSNL and other government employees to buy the shares. This will solve twin purposes — address the concerns of the employee unions as well as enable us achieve our objective of listing the company. This plan can be implemented only if the Department of Telecom as well as the unions accept it,” a top company source said.
But it remains to be seen whether this proposal goes through. For one, both DoT and the unions will have to agree. Secondly, there is no precedent of a public offering in India being restricted to certain section of public only. Moroever, if the sale of shares is restricted, it will not fetch the price that a regular disvestment would. Finally, even if such a float does take place there will be no appetite for these shares in the secondary market if FIIs and other investors are not allowed to buy.
And if they are allowed to buy BSNL shares through secondary transactions, then the original objections of the unions — fear of pri-vatisation, selling family jewels cheap etc — would not be taken care of.
Another BSNL source told ET that the PSU’s management was keen on going ahead with the listing, despite employee opposition, so that the company could be governed by corporate norms specified by Sebi. “The listing is not for the purpose of raising money for our expansion. We also want BSNL to be subject to corporate governance policies that all listed firms must subscribe to,” the executive added.
Earlier this year, the PSU had put the issue of a float on the back-burner after employee unions had threatened to go on an indefinite strike protesting the move. However, the issue was back in limelight last week when the government said the unions were favourable to the proposal.
“The unions will respond positively to the suggestion for the listing of BSNL before June 3, which will help BSNL in getting navratna status — very essential to maintaining its image and ensur-ing its survival and growth,” the government statement said. This led to fresh protests from the unions who alleged that they had given no such assurance and accused the communications ministry of misin-formation.
On Monday, the Joint Forum of Bharat Sanchar Nigam Ltd Unions and Executive Associations held rallies across all major cities to protest the IPO proposal.
BSNL is India’s largest telecom company in terms of revenues and sub-scriber numbers. The PSU, which has over 81 million customers (fixed-line and mobile), had revenues of Rs 39,750 crore in 2006-07, with a net profit of Rs 7,805 crore. BSNL has said it will invest about Rs 15,000 crore this fiscal to expand its mobile and broadband net-works across the country. It has also committed Rs 60,000 crore to ex-pand its telecom infrastructure and operations by 2010.
It is toying with the idea of offering shares only to government employees with a 'considerable' reservation for BSNL staff. If this proposal goes through, it will be the first such IPO in the country. The BSNL management plans to present this proposal to its striking union leaders soon.
The company is looking at a compromise formula as its plan to launch the country’s biggest IPO and raise about Rs 40,000 crore (over $10 billion) by offloading a 10% stake in the company has failed to take off so far.
Despite the public sector company’s management as well as communication minister, A Raja, holding talks with employees for several months now, the unions have not relented. In fact, BSNL employees have also threatened to go on an indefinite nation-wide strike and cripple the operations of the company, if the UPA regime goes ahead with the listing of the PSU.
“We are exploring the option of allowing only BSNL and other government employees to buy the shares. This will solve twin purposes — address the concerns of the employee unions as well as enable us achieve our objective of listing the company. This plan can be implemented only if the Department of Telecom as well as the unions accept it,” a top company source said.
But it remains to be seen whether this proposal goes through. For one, both DoT and the unions will have to agree. Secondly, there is no precedent of a public offering in India being restricted to certain section of public only. Moroever, if the sale of shares is restricted, it will not fetch the price that a regular disvestment would. Finally, even if such a float does take place there will be no appetite for these shares in the secondary market if FIIs and other investors are not allowed to buy.
And if they are allowed to buy BSNL shares through secondary transactions, then the original objections of the unions — fear of pri-vatisation, selling family jewels cheap etc — would not be taken care of.
Another BSNL source told ET that the PSU’s management was keen on going ahead with the listing, despite employee opposition, so that the company could be governed by corporate norms specified by Sebi. “The listing is not for the purpose of raising money for our expansion. We also want BSNL to be subject to corporate governance policies that all listed firms must subscribe to,” the executive added.
Earlier this year, the PSU had put the issue of a float on the back-burner after employee unions had threatened to go on an indefinite strike protesting the move. However, the issue was back in limelight last week when the government said the unions were favourable to the proposal.
“The unions will respond positively to the suggestion for the listing of BSNL before June 3, which will help BSNL in getting navratna status — very essential to maintaining its image and ensur-ing its survival and growth,” the government statement said. This led to fresh protests from the unions who alleged that they had given no such assurance and accused the communications ministry of misin-formation.
On Monday, the Joint Forum of Bharat Sanchar Nigam Ltd Unions and Executive Associations held rallies across all major cities to protest the IPO proposal.
BSNL is India’s largest telecom company in terms of revenues and sub-scriber numbers. The PSU, which has over 81 million customers (fixed-line and mobile), had revenues of Rs 39,750 crore in 2006-07, with a net profit of Rs 7,805 crore. BSNL has said it will invest about Rs 15,000 crore this fiscal to expand its mobile and broadband net-works across the country. It has also committed Rs 60,000 crore to ex-pand its telecom infrastructure and operations by 2010.
Tuesday, June 3, 2008
What An IPO Grade Can And Can’t Do For Investors - June 3, 2008
The grading of an initial public offer (IPO) is a new product, launched in mid-2007 by CRISIL. It is the first time that a product like this has been launched anywhere in the world. It is important for investors to understand how to use the product correctly, so that they can derive best value from it. Properly used, IPO grading can empower you, the investor, to take considered and informed investment decisions.An IPO grade reflects CRISIL’s opinion on how strong the company making the IPO is on fundamental parameters—business prospects, financial performance, management capability , and corporate governance—compared with other listed Indian companies.
In other words, it is an expert opinion on the “quality” of the company. CRISIL makes IPO grades available free of charge to all investors. You will see the grade displayed in the company’s IPO prospectus , advertisements, and application forms. The grades are assigned on a self-explanatory scale, from 1/5 to 5/5, with 5/5 being the highest grade.
What an IPO grade can’t do
So far, investors have been getting equity research and research on IPOs that conclude with a simple “Buy” , “Hold” or “Sell” recommendation . An IPO grade, by contrast, is neither an opinion on the issue price, nor a recommendation to buy, sell, or hold the shares. It is also not an opinion on the shares’ future market price or their suitability for a particular investor.
In other words, as an investor you should not use the IPO grade to assess whether the price of the IPO is right. For this, there are numerous other tools that are commonly used, among them a comparison of the price/earnings (P/E) ratio with that of other companies in the same peer group, and analysis of the P/E to growth ratio.
Second, the grade is no indication of how many times the issue will be subscribed—this depends on factors such as liquidity and market sentiment, which are unrelated to the fundamentals of the company.
Thirdly, the grade gives no indication of the price at which the issue will open, or the returns that are likely from the issue—technical factors can weigh heavily on opening prices, and returns will depend on investment time horizons.
And lastly, the IPO grade by itself does not tell you whether the IPO is a suitable investment for you. That depends on your age, the composition of your current investment portfolio , family situation, and requirement of money . A good financial advisor is the best person to help you with this.
How you can use the IPO grade
CRISIL believes that, as an investor, you need to answer three questions before deciding to invest in an IPO. Firstly, how strong is the company on fundamentals? Second, is it being offered at the right price? And third, is this the right investment for you?
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