Monday, December 18, 2006

Cairn India fixes issue price at Rs. 160

Cairn India, a crude oil and natural gas exploration and production company, has fixed its issue price at Rs. 160 per share. The low pricing is due to uncertainty in market conditions, and consequent weak response from investors. The company will now have to return nearly Rs. 335 crore to private equity investors, (PE) for pre-IPO placement done at Rs. 176 per share. The issue was oversubscribed just 1.14 times with QIBs portion subscribed 1.36 times, HNI 0.47 times and Retail 0.9 times. The company entered the capital markets with a public issue of 328 mn equity shares of Rs. 10 for cash at a premium to be decided through a 100% book-building process. DSP Merrill Lynch, ABN-AMRO Securities and JM Morgan Stanley were the book running lead managers.

Read Moneycontrol.com for more details.

SIDBI Venture to invest Rs. 30 crores in V&S International

SME Growth Fund of SIDBI Venture Capital Ltd. has invested 30 crores in Gurgaon-based textile manufacturer and exporter, V&S International Pvt. Ltd. The company supplies textiles and ready-made garments to retail chains in the US and Europe. SIDBI Venture Capital Ltd is the venture capital arm of the Small Industries Development Bank of India. It invests out of two funds, the SME Growth Fund and the Rs. 100 crore National Venture Fund for Software and IT Industry.
Of late, the private equity firms have shown a lot of interest in the textiles and apparels sector. KPR Mills, Koutons Retail are some of the firms that have received a round of PE funding.

Reliance Comm dials banks for Hutch deal

Anil Ambani is leaving no stone unturned to acquire the prized 67% stake of Hutchinson Whampoa in Hutch-Essar. As of latest reports, Reliance Communications has tied exclusivity agreements with a number of foreign banks, presumably, Citibank, HSBC, ABN-AMRO and UBS. This means that not only will these banks provide the necessary debt for the transaction, but the agreements will also prevent them from working with any other prospective or existing bidder. This agreement with the said four banks is crucial, as all have expertise in multi-billion dollar cross-border acquisition financing and their experience would have been of enormous use to rivals. RCL is already in talks with private equity funds such as Kohlberg Kravis Roberts & Co (KKR), Blackstone and Texas Pacific Group for equity financing.

For more, read the following articles The Economic Times, The Financial Express and Business Standard.

Zee Telefilms to raise up to Rs 900 crores via equity sale

Zee Telefilms is hitting the capital markets again. The company intends to raise around $200 mn (Rs. 900 crores) by diluting equity capital in two of its subsidiaries, 10% of Dish TV and 15% of Wire & Wireless India (WWIL), to part-finance expansion plans as a part of an ongoing restructuring programme. Zee plans to raise the money to acquire new customers and buy last-mile connectivity. The two companies are scheduled to be listed in February. Dish TV and WWIL are expected to raise Rs. 400 crores and Rs. 500 crores, respectively. The fund generation suggests a valuation of Rs. 4, 000 crores and Rs. 3, 000 crores for Dish TV and WWIL, respectively. The Bombay High Court has approved the de-merger of cable undertaking of Zee Telefilms into WWIL and the regional and news broadcasting undertaking into Zee News Ltd. ZTL would start trading from December 18 as the de-merged entity, to be renamed Zee Entertainment Enterprises.

For more details, read the article from The Economic Times.

NYMEX initiates talks to acquire 9% stake in MCX

Multi-Commodity Exchange (MCX), whose IPO is one of the most looked forward to, is about to bring in a new strategic investor. The New York Mercantile Exchange (NYMEX) is said to be in discussions with MCX for a 7% stake. Earlier, Fidelity International had picked up 9% stake in MCX for $49 mn (Rs. 220 crores). Merrill Lynch is the advisor to MCX on the deal, as well as the manager to the issue. The deal may be valued anywhere upwards of $60 mn (Rs. 270 crores). Both exchanges have declined to comment on this issue. NYMEX had earlier tried to acquire ICICI’s 7% equity stake in NCDEX, which eventually went to Goldman Sachs. Founded by Financial Technologies India, MCX is India’s largest commodity exchange. It accounts for 56% of the total Indian commodity and futures market with an average daily turnover of about $1.5 billion. Indian exchanges are waiting for clarity on the FDI norms for exchanges, even as the government formulates the policy on foreign holding in Indian commodity bourses. SEBI recently issued guidelines for the BSE, proposing a cap of 49% on foreign holding, which includes 26% FDI and the balance 23% for FIIs. Industry anticipates that SEBI would maintain these norms for commodity exchanges in the country as well.

For more details, read the article from The Economic Times.

TravelPort India acquires domestic tour operator

After Thomas Cook’s acquisition of Travel Corporation of India, here’s some more M&A news in the travel sector. Mumbai-based TravelPort has acquired Shree Balaji Tours for an undisclosed sum. TravelPort is one of the largest franchisee travel houses in the country, with 65 franchisee outlets in 8 cities and a turnover of Rs. 60 crores. Shree Balaji Tours has a network of 400 agents and offices in five cities and close to 90% of its Rs 20 crore turnover last fiscal came from hotel sales for Goa. TravelPort has the backing of strategic private equity investors; this particular transaction has been funded using equity and cash. With this acquisition, TravelPort has become the largest domestic tour player in Goa. Javed Akhtar, CEO, TravelPort, says that Rs. 50 mn will be invested in Balaji to fuel expansion plans in Goa, including promotion of tourism, and underwriting of hotel properties in Goa. TravelPort is looking forward to more domestic acquisitions in the future, notably in the Kerala tourism space.

For more, read the article from Daily News and Analysis.

DE Shaw to invest Rs 117 cr in Amar Ujala Publications

DE Shaw, one of the worlds largest Hedge Funds, is taking an 18% stake in North India based media house Amar Ujala Publications and its printing company for Rs 117 crore, reports Economic Times.

According to the report, DE Shaw would pick 18% stake in Amar Ujala Publications through a preferential allotment for a cash consideration of Rs 58.5 crore along with an 18% stake in A&M Publications, the printing unit of the media house for a similar consideration of Rs 58.5 crore, thus valuing the entities at about Rs 650 crore cumulatively.

Amar Ujala Publications is presently a closely-held company engaged in the business of publishing and printing the Hindi newspaper Amar Ujala which is circulated in north Indian states. A&M Publications, which prints newspapers exclusively for Amar Ujala Publications, is promoted by the Amar Ujala Group.

D.E. Shaw, a multi-strategy hedge fund having assets under management of $25 billion, had recently started Indian operations and last month invested $8 million Amtek India through a preferential allotment of shares

Read article from The Economic Times

MIC Electronics plans an IPO

MIC Electronics, an Hyderabad based manufacturer of LED display systems, is planning to raise close to Rs 100 crores through an IPO in first quarter of January, reported Business Standard. MIC Electronics is into media (LED display), Infotech (software) and telecommunications business

The amount raised is expected to be utilized for infrastructure development, rentals fo screens, development of 3D LED display screens and ramping up research & development amongst other things. Plans are also on to acquire Infostep, a US based company and also venture into entertainment theme park development.

Edelweiss Capital were appointed advisors to the issue which will constitute 25.34% of the company’s fully diluted post issue paid up equity capital.

Read article from Business Standard