Wednesday, January 31, 2007

T Rowe Price plans mutual fund business in India

T Rowe Price, one of the world’s largest investment management companies, plans to enter the mutual fund business in India. They follow a slew of global asset management companies such as Credit Suisse and JP Morgan eyeing a pie of the country’s booming asset management market. T Rowe Price is already invested in companies such as Bharti Airtel, Balaji Telefilms, Financial Technologies, ICICI Bank and Moser Baer through T Rowe Price New Asia Fund.

T. Rowe Price provides a broad array of mutual funds, sub-advisory services, and separate account management for individual and institutional investors, retirement plans and financial intermediaries. The company also offers a variety of sophisticated investment planning and guidance tools. It manages over $308.1 bn assets combining the assets of T. Rowe Price Associates, Inc., T. Rowe Price International, Inc., T. Rowe Price Global Investment Services and T. Rowe Price Global Asset Management. Several global majors are seriously looking at the country’s AMC business, buoyed by the rising stock markets and the low penetration of the mutual fund products among retail investors. Last week, UBS acquired Standard Chartered’s Indian AMC business. Korean company Mirae Assets Group and AIG are also awaiting the regulator approval, as all these companies plan a solo entry into the country.

Read the Business Standard article.

Reserve Bank of India hikes repo rate by 25 bps to 7.5%, keeps other rates unchanged

The Reserve Bank of India (RBI) has hiked the repo rate (rate at which RBI lends to the market) by 25 bps to 7.5%, while keeping reverse repo (rate at which RBI borrows from the market), bank rate and Cash Reserve Ratio (CRR) unchanged at 6%, 6% and 5.5%, respectively. The bank has also kept inflation target steady at 5-5.5%.

Read more in the Business Standard article.

Tata Steel makes the winning bid for Corus at 608 pence per share

Tata Steel has been declared the winner of the Corus bid by the UK Takeover Panel. Tata Steel made the winning bid of 608 pence per share versus 603 pence per share that was bid by Companhia Siderurgica Nacional (CSN) in the ninth round of bidding. The deal pegs the EV of Corus at $13 bn and puts its market capitalization at $10.9 bn. The Tata-Corus combine will create the world's fifth largest steel producer. Corus was created through the combination of British Steel and the Netherlands' Royal Hoogovens in 1999.

Lazard Limited and Goldman Sachs Group, Inc. were the financial advisers to CSN. UBS AG acted as CSN's corporate broker. Credit Suisse Group, JP Morgan Cazenove and HSBC Holdings Plc were advisers to Corus. NM Rothschild & Sons Limited, Deutsche Bank AG and ABN-AMRO Holdings NV were advising Tata Steel.

Read minutes of the bidding, further news comments and the entire story of the acquisition in Business Standard.

Trinity Capital buys 10.43% in Pipavav Shipyard

Trinity Capital has bought a 10.43% stake in Pipavav Shipyard Limited for Rs. 104 crores. Pipavav Shipyard has been promoted by Nikhil Gandhi-backed Sea King Infrastructure. IL&FS and EXIM Bank are the existing investors in Pipavav Shipyard; they have a majority 51% stake in the company. As part of the transaction, Trinity will build a 150 acre-township in the vicinity of the shipyard. This will provide housing, recreational facilities, schools, hospitals and commercial offices.

Pipavav Shipyard plans to build the largest integrated ship building yard in India, near the Pipavav port in Gujarat. The yard will also be the fifth largest in the world. It will have a capacity of 300,000 tonnes (dead weight tonnage). The Pipavav port was developed by the Nikhil Gandhi Group and is now handled by Maersk. The 175-acre shipyard will have the capability to build ships and vessel types ranging from aircraft carriers and luxury liners to oil tankers. It will have the capacity to build 12 large ships simultaneously. The project is likely to see investments of Rs. 8000 crores over the next 7 years. The shipyard will be strategically located between the two busy ports of Kandla and Mumbai. It will also be the only major shipyard between Dubai and Singapore.

Read the article in Business Standard.
Related Post: Trinity to raise additional funds of $ 1bn for Indian realty

NDTV Networks discusses stake sale to Blackstone; may list on LSE AIM

Rumour has it that Blackstone is probably looking at buying a stake in NDTV Networks, an NDTV Group company as part of an investment consortium. NDTV Networks plans to raise $130-160 mn by diluting 25-30% to the consortium, valuing the company at $433-640 mn. The money raised will be used for establishing new channels and businesses. NDTV Networks intends to list on the London Stock Exchange AIM market by the stake sale. Jefferies International Limited is the merchant banker to the issue.

Blackstone had recently invested $275 mn in Hyderabad-based Ushodaya Enterprises, owners of Eenadu and ETV, and Ramoji Rao Film City, one of the largest investments by a private equity fund in an Indian media company (See Related Post).

NDTV Networks will invest $106 mn of the cash in NDTV Imagine Limited, a Hindi mass entertainment channel with film director Karan Johar as partner, and $25.3 mn in NDTV Lifestyle Limited, a channel dedicated to travel, food, shopping, health and wellness. NDTV Networks also owns NDTV Labs, which develops technology and software solutions for TV broadcasting, NDTV Convergence, which owns and operates websites, and 50% in NDTV Media Services Private Limited, a JV with Genpact India Holdings, a media process outsourcing firm for overseas clients.

Read the Business Standard article.

JK Cement buys Nihon Nirman for Rs. 42 crores

JK Cement has acquired Nihon Nirman from the Industrial Development Bank of India (IDBI) for Rs. 42 crores. The acquisition of the 300,000-tonne Nihon Nirman plant will push up JK Cement’s capacity to produce grey cement to 4.3 mn tonnes per annum. JK Cement would invest another Rs. 33 crores for converting the white cement making plant into a grey cement plant. The production is expected to begin by September and would help JK Cement increase its grey cement capacity at a lower cost. The grey cement would be produced from Nihon Nirman and will be sold in the northern markets, where the company enjoys a strong presence. A team from the Japanese firm Taiheiyo Cement Corporation visited the Nihon Nirman site and calculated that it could produce 300,000 tonnes of grey cement per annum. The plant will cater to Rajasthan market, especially in the Jodhpur and Ganganagar belt. With this new grey cement plant, the company expects to save up to Rs. 1000 per tonne.

Article in the Business Standard.

Air India, Indian merger to be cleared by Union Cabinet by Feb-end

The merger of India’s international airline Air India and domestic carrier Indian may get clearance by the Union Cabinet by February-end. The Committee of Secretaries has submitted its recommendations regarding the merger to the Group of Ministers (GoM) headed by External Affairs Minister Pranab Mukherjee. The GoM will meet soon for a final consideration of the recommendations before sending it for the Union Cabinet’s approval. Once the Cabinet approval is received, the two carriers will undertake the legal steps necessary for the merger which should be completed within 3-4 months. However, complete operational and manpower integration will take as much as 12-18 months. Total integration of the two carriers would be completed by end-2008.

The merged entity will become one of Asia's largest airlines with a fleet strength of more than 100 aircrafts. It will have one chairman and one board of directors. It will also add more aircrafts and introduce new routes. The advantages accruing from the merger would comprise additional capacity, additional routes and staff rationalization as excess staff could be deployed on new routes. Following the global trend, the merged entity will cater to both international and domestic markets.

Read The Economic Times article.