IPO News
November 10, 2009
·Astec Lifesciences IPO subscribed fully
The Astec Lifesciences IPO closed for subscription on 4th November. It received a mild response on the last day and was subscribed 1.56 times. The non-institutional investors’ portion got subscribed 3 times; retail segment was subscribed 2.36 times and QIB 0.61 times. The issue was of 75,00,000 equity shares of Rs 10 each for cash at a price of Rs 77-82 per equity share, aggregating Rs 57.75-61.50 crore. The company is engaged in the manufacture and sale of intermediates, active ingredients and formulations in the off patent–proprietary category with a focus on agrochemical and pharmaceutical sector.
·Rural Electrification Corp to divest 20% via FPO
P Uma Shankar, CMD of REC (Rural Electrification Corporation) said the company would be filing a draft red herring prospectus (DRHP) with SEBI by mid-December 2009. The company will divest 20% via FPO (follow-on-public offering) including 15% fresh equity and 5% government stake dilution. The FPO of 17.17 crore shares will hit the market by February 2010 and the company will reserve 50% for QIBs, 15% for HNIs and 35% for retail investors.
·Intrasoft Technologies files IPO papers with SEBI
Intrasoft Technologies, owner of 123greetings.com has filed a draft red herring prospectus (DRHP) with the Securities & Exchange Board of India (SEBI) for a public issue of 37,00,000 equity shares of Rs 10 each. The issue will constitute 25.12% of the post issue paid up capital of the company. The company intends to utilize the issue proceeds for branding & promotion; purchasing a corporate office at Kolkata and investment in technology infrastructure. Out of proceeds, it is planning to use over Rs 35 crore for above three purposes. For the period ended March 31, 2009, the company reported total income of Rs 10.52 crore and profit after tax of Rs 5.2 crore.
·GPL eyes IPO by end-Dec, to strongly focus on affordable housing
Godrej group company, Godrej Properties Limited (GPL), plans to hit the market with its IPO by end-December. A DRHP has been filed with SEBI for the purpose. The company proposes to issue fresh capital to the tune of around 13 per cent of its present capital. The proceeds of the issue will be used to fuel Godrej Properties’ expansion. The company’s thrust would be on affordable housing which will be its main growth-driver and in the future the revenue-mix of the company would be 80 per cent from residential housing (primarily affordable) and the balance from commercial realty.
·Coal India engages fund managers for IPO
State-owned Coal India Ltd has engaged large fund managers for its coming IPO which is likely to hit the market within a year. CIL, which had received Navratna status last year, was scheduled to get listed in the bourses within a three year period. Apart from this, it also planned to offer stock options to its over four lakh employees besides considering a proposal to issue shares to its former employees. Turning to coal imports, he said that coal import was increasing by 20 per cent annually. Import of coal was necessary since CIL could not meet the entire demand supply gap of coal.
·PSU divestment back on govt agenda
Home Minister P Chidambaram announced on 5th November that all profitable PSU’s are to give 10% equity to the public sector. The
government has made it mandatory for all listed profitable PSUs to disinvest 10 % to public sector. All unlisted PSUs which do not have any accumulated losses and positive networth and have made profits would be listed. Hitherto, the policy was to put the sale proceeds in a National Investment Fund (NIF) and use only its dividends for social security schemes. But given the tight fiscal situation, a special dispensation is being made for the three-year period 2009-12. The corpus comprising deposits from April 2009 till March 2012 will now be available in full for investment as capital expenditure in specific social sector schemes determined by Planning Commission and Department of Expenditure.
Indian corporates use downturn to reduce costs
November 10, 2009
The global crisis changed the growth oriented goals of Indian businesses while there was a focus on operational effectiveness to ensure survival and companies undertook measures to achieve this as per a Price water house Coopers survey, Beyond the Downturn.

However, India Inc. seems to have mitigated the impact of the meltdown on their businesses with over 91% respondents executing vital cost reduction and 70% reviewing operational/working capital cycle.
Moreover, India Inc. is bullish about its prospects and is beginning to assay growth again with the economy appearing to be on a path to recovery.
Meanwhile, it is said that survey respondents ranked cash flow management, difficulty in forecasting results and maintaining employee morale during the downturn as key constraining factors.
Further, majority of the survey respondents identified benefit from achieving increased operational effectiveness by following cost reduction, reduction in working capital and optimization of supply chain as a significant opportunity resulting from the downturn.
On the other hand, strong domestic economy, stable banking and financial system and timely government intervention were seen as key factors responsible for the less impact of the downturn on India.
Additionally, 99% of respondents viewed growing demand/volumes as their key recovery expectation with new hiring/ capacity addition getting the second priority.
ICICI, SBI write off, sell debt to reduce bad loans
November 9, 2009
By restructuring the repayment terms of prospective bad loans and writing off loans in Q3, the leading banks are putting in check their non-performing assets (NPAs).

However, State Bank of India (SBI) restructured Rs 2,832 crore loans, while ICICI Bank did so with Rs 850 crore of loans. Further, SBI wrote off Rs 900 crore of bad loans in the first half of 2009-10 while ICICI has written off Rs 600 crore in Q2.
Moreover, the level of gross NPAs depends on the amount of write-offs/upgrades of NPAs hence; the more relevant figure is the absolute level of net NPAs while SBI’’s advances are growing faster than the system at 16%, but its NPAs are also growing.
Meanwhile, there is no need for concern as most loans are in the recoverable category and they stemmed from home loans, education loans and international business, which were closely related to the downturn.
In addition, the sale of bad loans also helped ICICI Bank ensure its gross NPAs were lower at Rs 9,200.89 crore at the end of Q2.
On the other hand, the bank restructured about Rs 4,800 crore of bad loans whereas in the next 2-3 quarters they should be able to clean up their balance sheet.
As for HDFC Bank, gross NPAs rose to Rs 2,025.88 crore at the end of Q2, about 20% higher than a year earlier while most of the bad loans on HDFC Bank’’s books are on account of the merger of Centurion Bank.
PORTFOLIO REBALANCING TO STAY ON TRACK
November 9, 2009
Portfolio re balancing is the process of bringing the different asset classes back into appropriate proportion following a significant change in one or more.

Over the time, as different asset classes produce different returns, the portfolio’s asset allocation changes. To recapture the portfolio’s original risk and return characteristics, the portfolio must be rebalanced to its original asset allocation.
The primary purpose of rebalancing is to maintain a consistent risk profile. Periodic rebalancing will help to avoid counterproductive temptations in the market.









