The last couple of years have been exciting for the Investment Banking community to say the least. The action though has not been limited to large ticket deals. One gets to hear about high profile moves every now and then. DSP ML seems to have been affected more than others with movements of Munesh Khanna and Sanjay Sharma.
Vikas Khattar is the latest to make the big move. Citi India has poached Khattar from DSP Merrill Lynch to add strength to its equity capital markets team. He will be joining in as a Director early next month. Khattar is an MBA from IIM Calcutta and an engineer from the Birla Institute of Technology and Science. He was a veteran at DSP Merrill Lynch with 11 years experience.
Citi’s equity capital markets team is headed by another erstwhile DSP Merrill Lynch stalwart, Ravi Kapoor. Kapoor left DSP ML, where he was head of equity origination and capital markets, in April 2005 to kick-start the same business for Citi. Khattar will be part of Kapoor's team, which reports to Pramit Jhaveri, who heads investment banking for Citi in India.
For its part DSP Merrill Lynch is also on a hiring spree since Merrill Lynch bought out its Indian partner in December 2005. DSP is aggressively foraying into new areas including private wealth management, real estate and principal investing and hiring to staff these businesses. Indeed, worldwide Merrill Lynch has been beefing up its global private client non-resident Indian (NRI) business at the cost of Citi and has lured Rahul Malhotra, Inderjeet Hora and Aseem Arora from Citi in the last few months.
Source: Finance Asia
Wednesday, May 23, 2007
Monday, May 21, 2007
Valuation dilemmas lead to panic fall in Bajaj’s stocks
The newly carved out demerger is expected to increase the market cap aggregate of the daughter companies by 10%. This was infact cut short with what could have been a 50% increase.
The mangement of the parent company decided to give its insurance JV partner Aliianz a call option to increase its stake in the life insurance venture to 74% and the non life general insurance venture to 50% which would expire in April 2016.This according to the management was a safety procedure which saw a potential valuation of the insurance business by several intermediaries of 13-18 thousand crore to a mere 575 crore of the Life Insurance and 421 crore for the general insurance venture by the end of FY08.
The combined market cap of the demerged entities is expected to be around 30,000 crore as against 27,000 crore of the prevailing BAL. It could have seen a valuation of 36,000 crore had there been no put-call options.
The demereger according to Rahul Bajaj would be from effect from 31 March 2007 but the process could take upto December 2007.This would mean that the existing shareholders would recive the shares of the new company only then which could have been a possible reason for the inexplicable fall in Bajaj’s stock on 17th May followed by another fall on 18th May which saw the market cap shed by 15% or Rs 4000 crore
Source: The Economic times, Mint
The mangement of the parent company decided to give its insurance JV partner Aliianz a call option to increase its stake in the life insurance venture to 74% and the non life general insurance venture to 50% which would expire in April 2016.This according to the management was a safety procedure which saw a potential valuation of the insurance business by several intermediaries of 13-18 thousand crore to a mere 575 crore of the Life Insurance and 421 crore for the general insurance venture by the end of FY08.
The combined market cap of the demerged entities is expected to be around 30,000 crore as against 27,000 crore of the prevailing BAL. It could have seen a valuation of 36,000 crore had there been no put-call options.
The demereger according to Rahul Bajaj would be from effect from 31 March 2007 but the process could take upto December 2007.This would mean that the existing shareholders would recive the shares of the new company only then which could have been a possible reason for the inexplicable fall in Bajaj’s stock on 17th May followed by another fall on 18th May which saw the market cap shed by 15% or Rs 4000 crore
Source: The Economic times, Mint
Bajaj announces demerger into 3 new entities
After much speculation of a demerger, one to the effect was finally anounced on 17th May. The Bajaj’s business will be rolled off into 3 new companies with the existing Bajaj Auto Ltd continuing as the holding company which will also have a mammoth Rs 6,000 crore in cash.
Under the new scheme of arrangement the auto businesses will come under the Bajaj Holdings and Investments Limited (BHIL),it will also have 1,500 crore in cash and the Financial services company which includes a joint venture with the UK insurance major Allianz will continue operations under as Bajaj Finserv (BFL).It also includes consumer finance, windpower projects and Rs 800 crore in cash.
Rajiv Bajaj will continue as the MD and CEO of BHIL whereas Sanjiv will manage BFL and remain the Executive Director of BHIL. Rahul Bajaj will remain the chairman of all the three companies.The board of the two new companies will have four members comprising Rahul,Madhur,Rajiv and Sanjiv Bajaj. However the BAL board will not be tampered with.
Source: The Economic Times, www.livemint.com
Under the new scheme of arrangement the auto businesses will come under the Bajaj Holdings and Investments Limited (BHIL),it will also have 1,500 crore in cash and the Financial services company which includes a joint venture with the UK insurance major Allianz will continue operations under as Bajaj Finserv (BFL).It also includes consumer finance, windpower projects and Rs 800 crore in cash.
Rajiv Bajaj will continue as the MD and CEO of BHIL whereas Sanjiv will manage BFL and remain the Executive Director of BHIL. Rahul Bajaj will remain the chairman of all the three companies.The board of the two new companies will have four members comprising Rahul,Madhur,Rajiv and Sanjiv Bajaj. However the BAL board will not be tampered with.
Source: The Economic Times, www.livemint.com
Friday, May 18, 2007
HDFC to raise money through ADR’s , preferential allotment
HDFC is expected to raise $1 bn through ADR’s and preferential allotment. It plans to raise about one-fourth of the money through equity alloted on a preferential basis which will most likely be to its promoter HDFC Group as a public offer could see the promoters stake diminish. The promoter group has a current holding of 21.56% and the issue will increase its stake to 23%.
It currently needs a strategic investment of Rs 1390 crore to retain its stake and then it would go for a public offer of equity shares in domestic markets
as well as international markets like the US in the form of American Depository Shares(ADR)rasing the residual 2800 crore.
Source: The Economics Times
It currently needs a strategic investment of Rs 1390 crore to retain its stake and then it would go for a public offer of equity shares in domestic markets
as well as international markets like the US in the form of American Depository Shares(ADR)rasing the residual 2800 crore.
Source: The Economics Times
SBI allowed to reduce stake in subsidiaries
The lok sabha allowed SBI to reduce its stake in its seven subsidiaries from 55 percent to 51 percent. This will make their shares available to retail investors by listing on the stock exchanges
The State Bank of India (Subsidiary Bank Laws) Amendment Bill, 2006, which amends the State Bank of Saurashtra Act, 1950, the State Bank of Hyderabad Act, 1956 and the SBI (Subsidiary Banks) Act, 1959 was passed by a voice vote. The bill also raised the authorized capital of these banks to Rs 500 crore, allow them to issue bonus shares and augment the number of nominated directors representing shareholders to a ceiling of three.This also gives the chairman of SBI the power to appoint chairmen of its subsidiaries.
The government however clarified that it has and would dismiss any proposal of reducing stake in the subsidiaries below 51% as it would like to have majority voting power in these to be state owned companies after RBI transfers its holding to the government in August.
Tthe SBI has 100 per cent stake in State Bank of Hyderabad, State Bank of Patiala and State Bank of Saurashtra. Stakes in State Bank of Bikaner and Jaipur, State Bank of Mysore, State Bank of Travancore and State Bank of Indore -- SBI's stake varies from 75 per cent to 98 per cent.
Source: The Economic Times.
The State Bank of India (Subsidiary Bank Laws) Amendment Bill, 2006, which amends the State Bank of Saurashtra Act, 1950, the State Bank of Hyderabad Act, 1956 and the SBI (Subsidiary Banks) Act, 1959 was passed by a voice vote. The bill also raised the authorized capital of these banks to Rs 500 crore, allow them to issue bonus shares and augment the number of nominated directors representing shareholders to a ceiling of three.This also gives the chairman of SBI the power to appoint chairmen of its subsidiaries.
The government however clarified that it has and would dismiss any proposal of reducing stake in the subsidiaries below 51% as it would like to have majority voting power in these to be state owned companies after RBI transfers its holding to the government in August.
Tthe SBI has 100 per cent stake in State Bank of Hyderabad, State Bank of Patiala and State Bank of Saurashtra. Stakes in State Bank of Bikaner and Jaipur, State Bank of Mysore, State Bank of Travancore and State Bank of Indore -- SBI's stake varies from 75 per cent to 98 per cent.
Source: The Economic Times.
Foreign Private Equity firms to take India’s infrastructure story ahead
The monetary requirements for building infrastructure set by the government seems to find foreign support .The centre has earmarked $320 bn in infrastructure investments by 2012 which it proposes to accrue from its Foreign exchange reserves in partnership with foreign funds.
Various Private Equity firms has approved of investments pertaining to infrastructure in India .Citigroup and Blackstone will float a $5 billion fund with India’s Infrastructure Development Finance Company (IDFC) and India Infrastructure Finance Company (IIFC) .3i, another UK based PE firm, has put in $500 mn in projects with IIFC as its partner, in India .The SBI along with Société Générale of France plans to Rs 18 bn to invest in infrastructure companies .It also plans to venture into private equity with a target to invest Rs 42 bn in infrastructure .About 65% of these funds will be invested in equity .US based TransAsia infrastructure holdings will be another infrastructure dedicated fund to be launched by the end of 2007.
However all this is subject to approval by RBI who dictates an upper limit for External Commercial Borrowings(ECB’s) in India and also the decision to use the forex reserves is reserved with the RBI.
Source: www.economist.com
Various Private Equity firms has approved of investments pertaining to infrastructure in India .Citigroup and Blackstone will float a $5 billion fund with India’s Infrastructure Development Finance Company (IDFC) and India Infrastructure Finance Company (IIFC) .3i, another UK based PE firm, has put in $500 mn in projects with IIFC as its partner, in India .The SBI along with Société Générale of France plans to Rs 18 bn to invest in infrastructure companies .It also plans to venture into private equity with a target to invest Rs 42 bn in infrastructure .About 65% of these funds will be invested in equity .US based TransAsia infrastructure holdings will be another infrastructure dedicated fund to be launched by the end of 2007.
However all this is subject to approval by RBI who dictates an upper limit for External Commercial Borrowings(ECB’s) in India and also the decision to use the forex reserves is reserved with the RBI.
Source: www.economist.com
Thursday, May 17, 2007
Indian BPO's want share in US markets;Genepact next in list
Genepact is harboring ambitions to upfold what could be the biggest Indian IPO in US markets and is speculated to be worth around $600 mn.
The listing in the New York bourse would make Genepact the third Indian BPO trading in US after WNS and EXL services listed on the NYSE and the Nasdaq respectvely.The proceeds from the share sale will be used to repay debt bligations and for realizing potential acquisitions, according to a filing with the US Securities and Exchange Commission.
Genpact will apply to have its common shares listed on the NYSE under the symbol “G”. The IPO will be managed by Morgan Stanley, Citigroup Inc. and JPMorgan Chase.
General Atlantic and Oak Hill Capital Partners hold 60 per cent of the company’s equity, while GE owns the remaining 40 per cent. All the three sareholders are diluting their stake through the proposed IPO, according to the SEC filing.
Source:www.bpowatchindia.com
The listing in the New York bourse would make Genepact the third Indian BPO trading in US after WNS and EXL services listed on the NYSE and the Nasdaq respectvely.The proceeds from the share sale will be used to repay debt bligations and for realizing potential acquisitions, according to a filing with the US Securities and Exchange Commission.
Genpact will apply to have its common shares listed on the NYSE under the symbol “G”. The IPO will be managed by Morgan Stanley, Citigroup Inc. and JPMorgan Chase.
General Atlantic and Oak Hill Capital Partners hold 60 per cent of the company’s equity, while GE owns the remaining 40 per cent. All the three sareholders are diluting their stake through the proposed IPO, according to the SEC filing.
Source:www.bpowatchindia.com
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