ICICI prepares for a pre-ipo placement

ICICI is looking for to pre-IPO placement of equity and Global FIs such as Goldman Sachs, Morgan Stanley, JP Morgan, Credit Suisse and Nomura among others are in line.

Apprantely 12-15 interests have been received and the deal will be sealed shortly.JP Morgan is the advisor for the pre-IPO placement while merchant bankers for the IPO have not yet been finalised. Sources believe I-Sec is valued at $7.5 Bn or 30,000 Cr, highest valuation for an I-Bank in India.

In February 2007, JM Financial had sold its 49 per cent stake in JM Morgan Stanley Securities for $445 million. The deal valued the entity at $908 million against DSP Merrill Lynch’s valuation of $1 billion, when Merrill bought out Hemendra Kothari’s 47 per cent stake in December 2005.

As reported by Business Standard

Mallya Wants Heinken's 37.5% Stake

Liquor baron Mallya is open & willing to buy 37.5% of heinken's share in UB. At this point both have equal stakes. Mallya says, "At today's price, I am a buyer".

Heinken get's its stake in UB from Scottish & NewCastle (S&N) after the worldwide takeover of the British brewer. The heinken-carlsberg combined takeover of S&N for $15.4 Bn was announced in jan.

Mr Mallya says Heineken is not yet a shareholder in UB pending global transaction. “My business agreement was with S&N, and Heineken will have to renegotiate a charter of rights. I cannot speculate on the outcome of our discussions,” he added.

Heinken's beer business is a direct conflict with UB's Kingfisher beer. Heinken is also a leading shareholder in Asia Pacific Breweries, makers of Tiger Beer, another competition to Kingfisher. According to a banker S&N's business charter agreement is not transferrable to Heinken, and that's where Mallya's leverage will come from.

report from ET

HDFC to raise $1Bn. for buying HDFC bank equity

This Business Standard article reports HDFC raising $1 Bn. debt finance for it's stake purchase in HDFC Bank over 18 months.

Fresh equity issuance being ruled out, raising debt remains only recourse.

HDFC Bank acquired Centurion Bank of Punjab in an all-stock deal. Following this, HDFC Bank announced a private placement of equity to HDFC to enable the mortgage lender to maintain its stake at the current level of 23.3%. This entails an investment of almost $ 1 billion by HDFC.

I hope market liquidating financing mechanisms are avoided (e.g Orchid Chemicals)

MTNL planning 50% stake offload in SunTel

In a case of wagging the dog by it's tail, MTNL, one of the shortlisted preferred bidder for Srilankan TelCo SUNTEL, is in talks for offloading 50% stake. As a 100% MTNL subsidiary SUNTEL would be subject to MTNL policies & practices and "SunTel is a profit making professionally run company, and MTNL doesnt want to change its working".

The PSU, which is a JV partner in Nepal’s United Telecom and also offers telecom services in Mauritius through its 100% subsidiary, has been scouting global markets for new licences to make up for shrinking local opportunities.

MTNL has lost its bid to acquire Telekom Kenya & failed to win mobile licences in Saudi Arabia, Qatar, Bhutan and several other countries. However second chance is around the corner— Qatar, Lebanon, Oman, Bahrain, Iran and Turkey are set to auction fresh mobile licences in the coming months.

As reported in Economic Times

Quippo, Oil & Gas Service Sector and A New PE Hotbed

Quippo Oil & Gas, a subsidiary of Quippo Infrastructure Equipment promoted by SREI Infrastructure Finance, is planning to put Rs.2400 Cr. over next two years in buying onshore rigs, off-shore supply vessels and pipe-laying barges.

Quippo Oil & Gas currently owns two onshore drilling rigs and one offshore pipeline-laying barge (bought for $120 Mn.) The plans are to deploy these to India & Malaysia. This Business Standard article reemphasises a global trend in O&G service sector.

There is a shortage of rigs across the world and its impact is being felt in India as well. The Oil & Gas service sector market is booming globally with M&A/PE activity.

Globally PE firms are active in the O&G service market due to crash and easing valuations, specially in the mid-market. Tight credit markets have put brake on largecap deals but middle market is growing 50%.

Richard Spears, VP of energy analysis and advisory firm Spears & Associates Inc. says "Right now, we have projects for 15 deals under way, when last year, at any one time, we had six or seven." Investors and companies hire Spears to analyze businesses during the due diligence process of a transaction. Spears said his private equity clients were sizing up businesses in well completion services, land and offshore drilling and production, and other parts of the oilfield services sector.

Some of the recent deals in the sector include First Reserve Corp buyout CHC Helicopter Corp for $1.5 Bn., US buyout firm Castle Harlan's Anchor Drilling Fluids US for $250 Mn.

Analyst Bill Herbert of research firm Simmons & Co said expects PE firms to snap up more small-cap oilfield service companies with either international franchises or technology that can be exported to international markets.

It will not be surprising to see some of the Infrastructure Funds moving in, on the sector.

Reality Major's REIT plans delayed

IndiaBulls RealEstate and Unitech Ltd. have put their Singapore REIT plans on hold siting volatile market conditions. DLF may follow too.

Unitech, IBREALEST & DLF had lined up a $0.5Bn,$1Bn & $1.5Bn. offer. Unitech and IBREALEST were exploring private placement, according to Business Standard. DLF too might delay the offer or go for $500Mn. private placement.

Indian developers, hit by soaring land costs and curbs on bank loans, are looking to tap REITs, which are not yet allowed in India, although draft guidelines for them were issued in December.

Read the article on Mint

UBS India Investment Banking is stepping on the gas

UBS will nearly double its investment banking staff in India to up to 180 (from 100 now) in the next year as it prepares to offer more services and retain its share of the increasingly competitive business, the head of UBS in India said.

UBS tops the merger and advisory table so far this year, up from seventh spot last year, data from Thomson Financial showed, leapfrogging rivals including Morgan Stanley , Citigroup , JPMorgan and Merrill Lynch.

Our challenge and our desire is to remain among the top three investment banks in India," Manisha Girotra, managing director and chairperson for UBS India, told the Reuters India Investment Summit on Thursday. The competition extended to staffing. Hiring and retention of talent were the biggest challenges, Girotra said, and took up 30-40 percent of her time.

UBS, the world's largest wealth manager, is also awaiting regulatory approval to offer additional services including fixed income, wealth management and high-end retail banking in India.
Globally, UBS has had a turbulent year. It closed Dillon Read Capital Management in May and in October announced its first group quarterly loss in five years. But it has said its wealth management business was poised for strong growth.

Source: Reuters

Reliance Cap bitten by the Investment Banking bug

The growth in the Indian Investment Banking field continues to lure more players .

Reliance Capital, having a presence in asset management, retail broking and insurance businesses in the country, now intends to start an investment bank in partnership with a foreign player, reported the Economic Times. Reliance Capital’s vice-chairman Amitabh Jhunjhunwala is said to be overseeing the initiative.

Bear Sterns and Paine Webber are some of the names floating around who could partner Relaince Capital in this venture.

Investment bankers from rival firms believe Reliance Capital can have a significant presence in the investment banking business, given the fact that it holds minority stakes in various companies across sectors, which could lead to securing fund-raising mandates of these companies.

RSM Equico on the prowl for acquirers

RSM Equico, an investment banking arm of US-based H&R Block, a $7 billion, Fortune 500 financial services company, is seeking local participants to join its “buyers’ pool”. A buyers pool refers to the collection of potential acquirers.

Hector J Cuellar, president, RSM Equico, is now making pitches to five dozen local industrialists in five days in a bid to enlist them into the buyers pool for close to 200 mergers & acquisition proposals from US medium-sized companies they have in the pipeline.

So far, RSM Equico has never had an Indian in its buyers pool till one of its accounting and consulting units operating in India informed that Batlilboi Ltd, the machine-tool maker and engineering services firm, was on the lookout. RSM Equico steered Batliboi’s acquisition of Quickmill Inc, a Canadian CNC lathe machine maker, for Rs 22 crore on March 27.

Source: DNA Money