Power Sector Ipos Seem To Be The Latest Buzz - July 31 , 2008

NEW DELHI: Power sector IPOs seem to be the latest buzz in government corridors following the trust vote. The power ministry is planning to list at least three central power companies over the next few months. While hydel major NHPC will be the first to hit the market sometime later this year, Damodar Valley Corporation (DVC) and North Eastern Electric Power Corporation (Neepco) would also come with public issues soon. The ministry is also planning to revive the follow-on public offer (FPO) of NTPC.

According to highly placed government sources, the ministry has favoured DVC’s proposal for a public offer which may be launched after the company floats its subsidiary. The company has already appointed consulting firm KPMG for exploring the various options through which the company can tap the capital market.

“The consulting firm will submit its report in the next two days, after which the company’s board will take a decision. Since DVC is a statutory company, the need was felt to set up a subsidiary company, which in turn could be listed,” a senior government official told ET.

The ministry has proposed that Delhi government may pick up 20% stake in the proposed subsidiary as DVC is set to become a major power supplier to the state. DVC is targeting a generation capacity of 11,000 mw by 2012, and Delhi is to get almost 20% or over 2,000 mw.

The government has also started the process of coming out with a public offer of Neepco. The government will first upgrade the company from the list of Schedule-B to Schedule-A and then come with a public offer. “The ministry of heavy industries has agreed to facilitate the process of its upgradation that is essential for the public offering. A proposal in this regard is already with the Department of Public Enterprises (DPE),” the official said. Neepco proposes to raise around Rs 400 crore to fund its projects.

Besides, the FPO of NTPC could also be revived. The finance ministry had earlier turned down the PSU’s proposal to raise nearly Rs 6,000 crore through a follow-on public offering as the government’s disinvestment policy does not favour dilution of equity in navratna companies. As per government estimates, over Rs 10 lakh crore of investment is required in the power sector during the 11th Plan.

MCX May Submit Fresh IPO Draft - July 31 , 2008

MUMBAI : The Multi Commodity Exchange (MCX) is expected to submit a fresh application to SEBI for its initial public offer as the validity period for its offering is set to end shortly.

“The Sebi approval for the IPO expires on August 11 and if the IPO is not listed then a fresh application has to be filed,” said a source close to the development on the sidelines of a conference.

The source said that the company can re-apply the very next day after the validity period of the earlier approval expires. But the fresh application has to be submitted within the current financial year. In case the company fails to do this, it would have to undertake a fresh audit, which would be a long-drawn process.

Companies that have received Sebi’s nod have to complete the process of listing within 90 days to avoid refiling their offer documents.

The other IPOs which Sebi had approved around the same time as MCX were that of UTI AMC and Reliance Infratel. While UTI AMC has decided to shelve its plans for now, there is no word on the IPO plans of Reliance Infratel.

In case MCX re-applies, it would be the only company in recent times to do so, an industry source said.

MCX expects to raise Rs 500-600 crore from the capital market, partly through issuing fresh equity and partly through dilution of the existing stake of shareholders. The issue price is expected to be close to Rs 600 per share.

According to the current draft prospectus, 60 lakh fresh shares would be issued, while existing equity holders would offload 40 lakh shares.

Of this, about 35 lakh shares of Financial Technologies (FTIL), one of the primary financiers of MCX, would be sold, bringing down its share in the company to 26% from the current 32%.

In February, FTIL had already sold 5% of its stake to New York Stock Exchange. At that time, the exchange was valued at $1.2 bn, or Rs 5,000 crore.

New Rules For IPO By SEBI - July 31, 2008

SEBI has finalized the guidelines for retail investors for investing in IPO in which they only have to pay to the extent of shares allotted to them and not 100% upfront advance for shares.

The payment system known as Application Supported by Blocked Amount (ASBA) that will require retail investors to bid at a cut-off price and to apply through self-certified syndicate banks (SCSBs), in which they hold accounts.

SEBI on Wednesday issued a circular that highlighted the eligibility criteria for an investor and also identified the roles and responsibilities of other intermediaries, registrars, merchant bankers and stock exchanges in the ASBA process.

Nu Teck India IPO Got Subscribed 0.14 Times - July 30 , 2008

Nu Teck India IPO got subscribed 0.14 times shares on the first day of offer on Tuesday. The offer would close on August 1.

The issue received bids over 6.07 lakh shares against 45 lakh shares on offer, as per the data available on the National Stock Exchange. The qualified institutional buyers got subscribed 27% while the non institutional portion did not receive any subscription and the retail portion was marginally subscribed.

The price band of the issue has been fixed between Rs 170 and 192. The public issue of 45 lakh shares of Rs 10 each, comprises of fresh issue of 3.5 lakh equity shares and an offer for sale of 10 lakh shares.

CRISIL has been assigned an IPO grade of 3 out of 5 for the issue.

The shares of the company would be listed on Bombay Stock Exchange and National Stock Exchange. The book running lead manager to the issue are SPA Merchant Bankers and India Info line.

The company intends to utilize the IPO proceeds to meet capital expenditure cost along with overseas acquisitions and augmenting the long term working capital requirement.

Serial Blasts Rock Bangalore

A woman was killed and at least six people were injured in a series of six low-intensity blasts carried out in eastern parts of the information technology capital this afternoon.

The woman, who was waiting at a bus shelter in Madivala on the Bangalore-Hosur road, was killed in the blast and her husband and another person were seriously injured, police said.

Bangalore was rocked by a major terrorist attack in December, 2005 when extremists opened fire in the famous Indian Institute of Science complex in which a Delhi IIT professor lost his life.

There were also blasts in other areas like Panthrapalya, Audugodi and Vittal Mallya Road within minutes of each other from the first blast at around 1330 hours.

Police Commissioner Shankar Bidari appealed to the people of the city to maintain calm and carry on with their normal life as police have been put on alert throughout the city.

He said timer device has been used in some of the blasts and explosives in quantity equivalent to one or two hand grenades have been used in some others.

Bidari termed it as an "act of miscreants" trying to disturb peace in Bangalore and appeared pre-planned. "We will get to the criminals and arrest them," he said.

Bomb disposal squads and forensic experts have rushed to the spot for investigations.

Chronology of some recent major bomb blasts in the country:

May 13, 2008: Eight serial blasts rock Jaipur in a span of 12 minutes leaving 65 dead and over 150 injured.

January 2008: Terrorist attack on CRPF camp in Rampur kills eight.

October 2007: 2 killed in a blast inside Ajmer Sharif shrine during Ramadan, in Rajasthan.

August 2007: 30 dead, 60 hurt in Hyderabad 'terror' strike.

May 2007: A bomb at Mecca mosque in Hyderabad kills 11 people.

February 19, 2007: Two bombs explode aboard a train bound from India to Pakistan, burning to death at least 66 passengers, most of them Pakistanis.

September 2006: 30 dead and 100 hurt in twin blasts at a mosque in Malegaon.

July 2006: Seven bombs on Mumbai's trains kill over 200 and injure 700 others.

March 2006: Twin bombings at a train station and a temple in Varanasi kill 20 people.

October 2005: Three bombs placed in busy New Delhi markets a day before Diwali kill 62 people and injure hundreds.

Somi Conveyor Beltings Trades Discount Over IPO Price - July 24, 2008

The stock debuted at Rs 37.65 which was also a high for the day so far during the day. At the debut price of Rs 37.65, the stock attracted 5% premium over the IPO price.

It hit a low of Rs 28.15. On BSE, 35.75 lakh shares changed hands in the counter.

The current price of Rs 28.50 discounts the company's nine months ended December 2007 annualised EPS of Rs 1.1 by a PE multiple of 25.90.

The fixed price IPO of Somi Conveyor Beltings was subscribed 1.92 times.

The company had entered the capital markets on 24 June 2008 with an issue of 62.27 lakh equity shares of Rs 10 each at a fixed price of Rs 35 (including a premium of Rs 25 per equity share) aggregating to Rs 21.79 crore.

The company is manufacturs rubber conveyor belts of various sizes used for industrial applications of material handling in various industries such as coal, lignite, iron ore, mining, cement, power, steel, fertilizer and sugar and it has also recently introduced food grade belts for tea gardens and salt industries.

The company proposes to utilize the net proceeds of the issue to part finance its Rs 35.09 crore project cost. The expansion and modernization project consists of setting up of new manufacturing unit, purchase of land and building for office use, meeting margin money requirement for enhanced working capital and meet the interest cost during the construction period.

The company, earning profits since last 5 years, had commenced production with an initial capacity of 36,000 meters per annum (MPA) and it has expanded to present operating capacity of 1,67,660 MPA.

Depending upon the width of the rubber conveyor belt the capacity utilization can be stretched up to 2,00,000 MPA.

The company reported a net profit of Rs 0.96 crore on sales of Rs 10.92 crore in nine months ended December 2007.

ARSS Infrastructure Projects IPO Rated CARE Grade 2 - July 23, 2008

MUMBAI: ARSS Infrastructure Projects Ltd’s proposed Rs 120-crore initial public offering has been assigned ‘CARE IPO Grade 2’ by rating agency CARE.

Grade 2 indicates ‘below average fundamentals’. The grading factors in the experience of promoters and management team of the company, healthy and diversified order book position, impressive client portfolio, satisfactory project completion track record, improving financial position & profitability, favourable outlook for the sector and continuous thrust being given by the government for infrastructure development.

SBI, taking active interest in the company by virtue of acquiring an equity stake, also supports the grading. However, the grading is constrained by relatively smaller size of the company, few pending litigations against the company and/or the promoters, limited geographical diversification, high fragmentation in the domestic construction sector leading to intense competition thereby impairing profitability and relatively low level of automation in the sector resulting in labour intensiveness. While the company is, by and large, in compliance with the regulatory requirement pertaining to corporate governance practices, it may be too early to comment on the same in view of company taking major initiative in this regard only in the recent past.

ARSS was incorporated on May 17, 2000 as ARSS Stones Pvt. Ltd. by Subhash Agarwal of Bhubaneswar and his three brothers, for executing construction projects in the railway sector. In the initial years, ARSS operated mainly in Orissa. It gradually expanded operations to other states, but to a limited extent, and diversified its activities to other construction segments such as development and construction of roads, highways, bridges and irrigation projects. The company also has crusher plants at four locations in different districts of Orissa for quarrying and crushing stones to produce various sizes of rock products required for execution of contracts. In January, 2008, SBI took a 7.97 per cent stake in the company.

The company is, by and large, in compliance with the applicable provisions of the listing agreement and clause 49 pertaining to corporate governance, although the entire initiative to this effect has been taken by the company only recently. There are few pending litigations against the company and also a criminal case against one of the promoters.

Case Against Anagram Relating To IPO Scam, Settled - July 22 , 2008

The Securities and Exchange Board Of India (SEBI) on Monday settled a case against Anagram Securities relating to alleged financing of key operators in IPO scam. Charge against Anagram Securities was that it acted as a financier to the key operators for making applications for public offers in fictitious and benami names during 2003-05.

The case has been settled through a consent order passed by the SEBI, but it does not restrict the market regulator from taking enforcement action. SEBI can reopen the pending case, if it finds any representation made by the firm in the consent proceedings are to be untrue or it has breached any of the clauses of undertakings during the proceedings.

The market regulator passed the order on the recommendations of its High Powered Advisory Committee.

IPO Opening Today - July 21, 2008

Vishal Information Technologies Ltd.

1. Opening Date : 21/07/2008.
2. Closing Date : 24/07/2008.

GSPC To Invest $1bn In KG Basin, Plans IPO - July 19 , 2008

NEW DELHI: Gujarat State Petroleum (GSPC) plans to invest $1 billion (about Rs 4,100 crore) to make its eastern offshore Krishna Godavari (KG) basin gas field operational by 2011. It is also contemplating an initial public offer (IPO) for funding part of the investment. The company may dilute up to 20% through the IPO.

The Gujarat government is, however, in no mood to sell 30% to a foreign strategic partner, as proposed earlier, Gujarat energy minister Saurabh Patel said. The state government owns 100% in GSPC. Gujarat chief minister Narendra Modi, meanwhile, denied any proposal to divest stake in the energy company through an IPO. “We are financially sound and do not need to go to the market,” Mr Modi said.

GSPC, which is about to receive government approvals for development plans for KG-8 gas field, has struck more gas in the block KG-OSN-2001/3. KG-22 holds three trillion cubic feet (Tcf) of gas, Mr Modi said, adding the entire block in his assessment holds more than 20 Tcf reserves. From 2011, GSPC will produce 8-10 million standard cubic meters per day of gas from the block. KG-8, according to the development plan submitted to oil regulator DGH, holds a minimum of 2.6 Tcf and a maximum of 5.6 Tcf recoverable reserves and can produce about 6 mmscmd gas.

Mr Patel said GSPC has taken 10 mmscmd capacity in Reliance Inds’ east-west pipeline to transport gas to consumers.
The government has also acquired 300 acres at Kakinada in Andhra Pradesh for on-shore gas processing plant.

Birla Cotsyn IPO Subscribed 1.11 Times On The Last Day - July 10, 2008

The IPO of Birla Cotsyn was subscribed 1.11 times on the last day of its issue on Wednesday.

The issue received 9,96,82,450 bids, out of which around 2,53,94,600 were received at the cut off price. The qualified institutional buyers' portion was subscribed 0.01 times, non-institutional investor portion was subscribed 3.11 times, and the retail portion was subscribed 0.73 times. The employee's portion was subscribed 0.04 times.

The company has extended the closing date of its initial public offer to July 9. Also it has revised its price band downward from Rs 15-Rs 18 to Rs 12-Rs 14 per share.

The company plans to utilize the IPO proceeds to set up an integrated textile unit and a garment manufacturing plant at the facilities located at Khamgaon, Ghatanji and Makkapur in Maharashtra. Also to fund the company's foray into retail outlets.

IPO Closing Today - July 9, 2008

1. Birla Cotsyn (India) Ltd.

Opening Date: 30/06/2008.

Closing Date: 09/07/2008.

IPO Of Birla Cotsyn Was Subscribed 0.44 Times - July 8, 2008

The IPO of Birla Cotsyn was subscribed 0.44 times on Monday. The issue received 3,95,64,350 bids, out of which around 2,06,87,100 were at the cut off price. The qualified institutional buyers' portion was subscribed 0.01 times, non-institutional investor portion was subscribed 1.46 times, the retail portion was subscribed 0.90 times and the employee's portion was subscribed 0.02 times.

The company has extended the closing date of its initial public offer to July 9. Also it has revised its price band downward from Rs 15-Rs 18 to Rs 12-Rs 14 per share.

The company plans to utilize the IPO proceeds to set up an integrated textile unit and a garment manufacturing plant at the facilities located at Khamgaon, Ghatanji and Makkapur in Maharashtra. Also to fund the company's foray into retail outlets.

UTI Asset Management Defers IPO Plans - July 8, 2008

Mumbai: UTI Asset Management Company has decided to defer its proposed initial public offer. The initial public offer was expected to hit the market this month.

The source said that with equity market in turmoil the sponsors of the AMC have decided to put off the IPO plan. SEBI had cleared UTI's draft red herring prospectus on April 22. The AMC was supposed to complete the IPO process with in three months, which will expire by July 21. Sources, said UTI AMC is going slow and it is unlikely that the process would be completed before the expiry date.

UTI AMC plans to offload 38.8 per cent or 48.5 million of outstanding shares of the company. The AMC had also planned a pre-IPO private placement of 16 million shares, which is also delayed. According to the SEBI regulations, UTI will have to restart the process by filing fresh application once the three-month period expires. Since the beginning of equity market meltdown, several IPOs including Wockhardt Hospital and the Dubai-based Emaar MGF had been called off mid-way following poor investor response.

UTI AMC has four sponsors: State Bank of India, Punjab National Bank, Bank of Baroda and Life Insurance Corporation of India, each holding 25 per cent stake. An analyst said the mutual fund had no dearth of funds and given the current market condition, the AMC would have decided not to go ahead with the IPO.

Birla Cotsyn Extended Its IPO - July 7, 2008

Birla Cotsyn extended its IPO closing date to July 9, 2008 due to the poor sentiments in the market that forced the company to extend the closing date. Also, the price band for the issue was revised downward to Rs12-Rs14 per share from Rs15-Rs18 per share earlier. The issue received 3,31,80,350 bids, out of which 1,88,73,750 bids were received at the cut off price. The qualified institutional buyers' portion was subscribed 0.01 times, non-institutional investor portion was subscribed 1.16 times and the retail portion was subscribed 0.54 times.

Birla Cotsyn Extends IPO Closing Date - July 5, 2008

MUMBAI: Birla Cotsyn has extended the closing date of its Rs 144.18-crore initial public offering to July 9, said an official with the lead manager of the issue. Further, the price band has been revised downward to Rs 12-Rs 14 per share from Rs 15-Rs 18 earlier, the official said.

The issue opened on June 30 and was to originally close on July 4.

Poor market sentiment has forced the company to extend the closing date. The issue was subscribed 0.46 times till 4 pm on Friday, as per the NSE website. The issue received 3,31,80,350 bids, of which around 1,88,73,750 were at the cut off price.
The qualified institutional buyers’ portion of 3,34,26,667 shares was subscribed 0.01 times, non-institutional investor portion of 1,00,28,000 shares was subscribed 1.16 times, and the retail portion of 2,33,98,667 shares was subscribed 0.54 times. While the employee’s portion of 48,33,333 hardly received any subscription.

The IPO proceeds would be utilised to set up an integrated textile unit and a garment manufacturing plant at the facilities located at Khamgaon, Ghatanji and Makkapur in Maharashtra. The investment would also fund the company's foray into retail outlets.

Ipo Closing Today - July 4, 2008

1. Birla Cotsyn (India) Ltd.

Opening Date : 30/06/2008.

Closing Date : 04/07/2008.

ONGC JV Mulls IPO To Raise Rs 3,500Cr - July 4, 2008

Ahmedabad: ONGC Petro additions (OPaL), an alliance between ONGC and Gujarat State Petroleum Corporation (GSPC), is mulling to hit the capital market to raise Rs 3,000-3,500 crore. ONGC are targeting to raise at least 20 per cent of the Dahej project cost via the offering.

OPaL is establishing a Rs 12,500-crore petrochemical complex at Dahej in Gujarat, proposed to be financed via a debt-equity ratio of Rs 8,700 crore and Rs 3,800 crore, respectively. ONGC holds 26 per cent controlling stake in OPaL, while GSPC holds 5 per cent.

Already, global companies such as Japan Polypropylene Corporation (JPP), an alliance between Chisso and Mitubishi Chemical Corporation; LyondellBasell Industries, which is one of the world's largest polymers, petrochemicals and fuel companies; Ineos group; Mitsubishi Chemicals and Mitsui are looking at a stake in the project. ONGC is also in negotiations with oil and gas PSUs like Indian Oil Corporation.

Meanwhile, OPaL has called a tender for its cracker unit, which comprises over 80 per cent of the project cost.

Birla Cotsyn IPO Subscribed 0.34 Times - July 3, 2008

The IPO of Birla Cotsyn was subscribed 0.34 times till Wednesday as per the NSE website. The issue received 2,40,89,100 bids, out of which 1,18,15,300 were received at the cut off price.

The qualified institutional buyers portion of 3,34,26,667 shares was subscribed 0.01 times, non institutional investor portion of 1,00,28,000 shares was subscribed 0.71 times and the retail portion of 2,33,98,667 was subscribed 0.33 times. The price band for the issue is Rs15 to Rs18 per share. The issue will close on July 4.

The company plans to utilize the IPO proceeds for setting up an textile integrated tetile unit along with a garment manufacturing plant at Khamgaon, Ghatanji and Makkapur in Maharastra.

CARE Has Assign'care IPO Grade 4' - July 2, 2008

MUMBAI: CARE has assigned 'CARE IPO Grade 4' to the proposed initial public offer of 1040 lakh equity shares of Jaiprakash Power Ventures Ltd. The grade indicates above average fundamentals.

The grading reflects the long track record of the promoters in hydro power sector, group support in terms of execution capabilities as well as resourcefulness and encouraging prospects of the power sector in the medium term. The grading also takes into account performance of the existing hydro power project in operation, project implementation status along with associated risk and financial tie up in respect of all envisaged projects under IPO.

Jaiprakash Power Ventures is a special purpose vehicle promoted by Jaiprakash Associates Ltd in December 1995 to build, own, operate and maintain the Vishnuprayag Hydel power project with an installed generation capacity of 4*100 MW. It is a run of the river hydro power project across the river Alaknanda, Uttarakhand.

The Vishnuprayag project has been fully commissioned in phases from June to Oct 2006. The approved cost of project by UPSERC is Rs 1682.72 crore, which has been funded with debt equity of 2.33.

Jaiprakash Power Ventures has executed a final power purchase agreement with the UPPCL dated January 16, 2007. The agreement is valid for a period of thirty years, which can be extended further for a period of twenty years upon mutually agreed terms.

In FY07, Jaiprakash Power Ventures earned total income of Rs 214 crore including net revenue from sale of energy and incentives. The profit after tax was Rs 72 crore after providing for depreciation of Rs 36 crore and payment of interest of Rs 91 crore.

During nine month period Apr-Dec 2007, Jaiprakash Power recorded total income of Rs 307 crore, operating profit of Rs 258 crore (84% margin) and net profit of Rs 149 crore (48% margin).

In December 2007, Jaiprakash Power Ventures undertook implementation of 1000 MW (2 x 500 MW), subsequently increased to 1320 MW(2x660 MW) coal based thermal power project at Nigrie, Madhya Pradesh which was earlier awarded to parent company Jaiprakash Associates. The project has been transferred to Jaiprakash Power.

Jaiprakash Power plans substantial investment in its group companies. It has proposed to invest in equity of the group company, Jaypee Karcham Hydro Corporation Ltd. to the extent of 55 per cent, which is currently implementing 1000 MW (4 X 250 MW) hydro-electric project at Kinnaur in Himachal Pradesh.

Further, Jaiprakash Power proposes to invest in equity of Jaypee Powergrid to the extent of 23 per cent, which is a joint venture company setup between Jaiprakash Hydro Power and Powergrid Corporation of India, to implement the transmission systems for evacuation of power from JKHCL’s hydro power project.

Birla Cotsyn IPO Subscribed 0.06 Times - July 1, 2008

The IPO of Birla Cotsyn was subscribed 0.06 times on Monday i.e the first day of the issue. The issue received total of 4.31 million bids, while 410,900 bids were received at cut-off price. The issue will close on Jul. 04, 2008.

The price band for the issue was fixed at Rs 15 to Rs 18 a share of face value of Rs 10 each. The company intends to raise Rs 1,441.8 million at the cap price of the price band.

The company plans to utilize the proceeds to set up a integrated textile unit and a garment manufacturing plant at the facilities located at Khamgaon, Ghatanji & Makkapur in Maharashtra. It will also fund the company's foray into retail outlets. The company is setting up a readymade garment-manufacturing unit.Along with this it is entering the retail garment sector by establishing 20 retail outlets across the country. The company is setting up a garment manufacturing facility.

Central Bank Of India Is Planning To Raise Money - July 1, 2008

Central Bank of India is looking at various options that also includes follow-on-public offer for raising funds, according to the Chairman and Managing Director H A Daruwala.

It also includes hybrid and subordinate bonds, which could be exercised to raise the required capital to meet the capital adequacy ratio (CAR) under the Basel-II norms.

Daruwala also added that the bank's capital adequacy ratio stood at 10.42 per cent in the last fiscal and targeted to raise the ratio to 11 per cent at the end of March, 2009.

The bank has entered the capital market in October 2007. As per the guidelines, it has to wait for one year before coming out with follow-on public offer.