Tuesday, January 30, 2007

Merrill names Sumeet Puri as head of India equity capital markets

Merrill Lynch has named Sumeet Puri as head of equity capital markets for its Indian operations as Wall Street firms rapidly expand their teams in the booming Indian capital markets. Sumeet Puri has been head of Asian execution and syndication and will also be in charge of Indian structured origination. Puri has partly spent his career in Mumbai, and is one of a growing number of bankers who are returning to India as deal volumes heat up and salaries for top talent become competitive with those in more developed markets like Hong Kong.

Merrill has increased its stake in its DSP Merrill Lynch JV in India to a controlling 90% from 40% for a consideration of $500 mn. Merrill was the fourth-ranked book-runner of Indian equity deals last year, according to market data provider Dealogic.

Indian investment banking revenues rose 23% to a record $413 mn in 2006, although fees on individual deals tend to be lower than in other markets due to intense competition. Indian equity deals had an average fee of about 1.6% last year, compared with nearly 2.3% for an average Chinese deal.

Read the article in Reuters.com.

Trinity to raise additional funds of $ 1bn for Indian realty

UK-based real estate fund Trinity Plc is planning to raise fresh funds. India-focused real estate fund Trikona Capital is the asset management company of Trinity promoted by two US-based entrepreneurs Rakshid Chugh and Aashish Kalra. This brings Trinity’s total fundraising to $1 bn this year. Trinity earlier had raised about $500 mn at London Stock Exchange’s AIM market last year. In addition to a secondary listing at the AIM market, it will also raise another private equity fund.

The secondary listing at the AIM market is expected to garner nearly $500 mn and the remaining will be raised through a PE fund. Trikona has declined to confirm the break-up of how the funds would be raised. The additional funding will be ploughed into the real estate sector.

Trikona is already in talks with several foreign investors to raise this additional funding. It has till now deployed funds worth $250 mn in the real estate sector and has committed funds worth $1 bn. Trikona has recently made investments in IL&FS Transportation Networks. It has also invested $20 mn to pick a 16% stake in a project owned by Kapstone Constructions. In October last year, Trikona entered into a JV with real estate developer Lokhandwala Builders for a residential project in Mumbai at an estimated cost of $103.4 mn. The fund picked a 49% stake in the venture for $21.5 mn.

Read The Economic Times article.

IndusInd Bank to raise Rs. 200 crores through GDRs; reports drop in net profit for 3rd consecutive quarter

IndusInd Bank will raise up to Rs. 190-200 crores through an issuance of global depositary receipts (GDR). This would lower the promoters’ stake holding in the bank to from 31.34% to 28%. It was also in talks with the ANZ Grindlays Group for a 5% placement. However the talks seem to have fallen out.

For the December quarter, the bank has recorded a 21% dip in its net profit to Rs. 21.6 crores, from Rs. 27.4 crores reported a year ago. IndusInd Bank has been reporting a substantial dip in net profits for the past three consecutive quarters. The sharp dip in the bank’s income from the securitization business, coupled with a rise in provisioning against NPAs, taxes and standard assets, took a toll on the bank’s earnings in the quarter under review. While net interest income was down 15.03% to Rs. 62.81 crores (Rs. 73.9 crores), income from non-interest streams was up 66% to Rs. 92.9 crores, vis-à-vis Rs. 55.98 crores earned a year ago. Operating profit of the bank rose by 57% to Rs. 69.8 crores, up from Rs. 44.5 crores.

Article in The Economic Times.

Catholic Syrian to sell 15% stake to AIF Capital Development; seeks RBI nod for sale

Kerala-based Catholic Syrian Bank is in the process of selling a 15% stake to AIF Capital Development, a Mauritius-registered private equity firm. It is seeking the Reserve Bank of India’s (RBI) permission for the same. The RBI’s policy on shareholding in private sector banks allows any single entity to own a maximum of 10% stake in a bank. Catholic Syrian Bank hopes to get clearance from the RBI to have a single shareholder owning more than 10% stake as has been allowed in Yes Bank (Rabobank - 19.29%) and Centurion Bank of Punjab (BankMuscat – 17.76%). AIF Capital Development has already obtained clearance from the Foreign Investment Promotion Board (FIPB). The government’s guidelines allow up to 74% foreign ownership in banks.

The bank plans to make a preferential allotment to AIF Capital to fulfill the central bank’s requirement that every private sector bank must have a minimum net worth of Rs. 300 crores. The bank had a net worth of Rs. 215.58 crores as on March 31, 2006. The Kerala-based bank has a network of 334 branches and extension counters, which include 5 NRI branches, 5 SSI branches, 5 industrial finance branches and 4 service branches.

Read the Business Standard article.

Garment manufacturer Mudra Lifestyle to come out with an IPO; price band at Rs. 75 – Rs. 90

Mudra Lifestyle Limited, a fabrics and garments manufacturer has fixed a price band of Rs. 75 – Rs. 90 for its initial public offer (IPO) of 9.58 mn equity shares. The funds raised will be utilized to finance the company's expansion plans. The IPO opens on Feb. 8 and closes on Feb. 14. The sole book running lead manager for the issue is SBI Capital Markets Limited. The shares are proposed to be listed on BSE and NSE.

The company will be investing over Rs. 177 crores to expand its manufacturing facilities by setting up a new integrated unit having all process of yarn dyeing, weaving and processing at Tarapur and garment manufacturing near Bangalore. Out of the total investments, the company proposes to utilize debt up to Rs. 100 crores. Mudra Lifestyle proposes to raise the balance amount through IPO.

The issue through 100% book-building process constitutes 26.62% of the post issue paid-up capital of the company. It has earlier made a pre-IPO placement of 1.92 mn equity shares to SIDBI Venture Capital Limited and State Bank of India. The net offer to public will constitute 25.29% of the post issue paid-up capital of the company.

For the fiscal year 2005-06, the company's total income was Rs. 107 crores, while PAT was Rs. 9 crores.

Read the article in The Economic Times.

Mitsui to divest its 51% stake in mining major Sesa Goa

The Economic Times reports that Japanese conglomerate Mitsui and Company has decided to sell its 51% stake in Sesa Goa, India’s largest iron ore mining company. Morgan Stanley is the advisor to Mitsui on the sale. Some of the biggest names in steel and mining have shown interest in acquiring Mitsui’s stake. These include Arcelor-Mittal, Tata Steel, JSW Steel, BHP Billiton and Rio Tinto. Sesa Goa is the only company in which Mitsui has a majority stake. The Japanese major holds an equity stake of less than 51% in some of the world’s top iron ore mines, which include companies like CVRD of Brazil and in Australia.

Related Post: Mitsui’s 51% stake in Sesa Goa up for sale

Himatsingka to acquire majority stake in Italian textile brand Bellora

Bangalore-based textile design and manufacturing firm Himatsingka Seide is acquiring 70% equity stake in Italian textile company Giuseppe Bellora SpA for an undisclosed amount. The transaction is expected to be completed in February 2007. The acquisition is part of Himatsingka's strategy to acquire high-end distribution networks in the global home textile segment. Established in 1883, Bellora is a pan-European luxury brand in the bed linen segment and has generated revenues of about €29 mn in 2006. Apart from exclusive stores in Italy and other parts of Europe such as Spain, Portugal, Switzerland, Germany and France, the brand has a presence in departmental stores, like Harrods in London, La Rinascente in Milan, and Bonne Marche in Paris, among several others.

Read the article in The Economic Times.