Archive for November 10th, 2009

IPO News

ipo news

·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

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.
Indian corporates use downturn to reduce costs
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.