Posts Tagged ‘Capital Market’

PE Exits through Bulk & Block Deals: SMC Capitals

SMC Capital Equity Head

According to the SMC Capitals report, the capital market bounce starting April 2009 has seen several PE (Private Equity) funds selling their investments in the open market.

🙂

The PE funds have sold from April 2009 till date, an amount to the tune of about Rs 1531 crore through bulk deals and block deals.

SMC Capitals report on PE funds selling investments :


1. The capital market bounce starting April 2009 has seen several PE (Private Equity) funds selling their investments in the open market.

2. The severe capital market correction of 2008 has resulted into several PIPE (Private Investment into Public Enterprises) investments into listed companies by PE funds, facing huge losses with severe wealth destruction.

3. However, the recent market bounce has given a fresh breather of life for several PE investments with impressive recovery of losses.

The PE funds have sold from April 2009 till date, an amount to the tune of about Rs 1531 crore through bulk deals and block deals.


4. The several prominent exits, either partial or full, by PE funds during this period are such as:

– ChrysCapital sale of their stake in Shriram Transport Company for an amount of about Rs 300 crore.

– Orient Global sale of their stake in India Infoline for an amount of about Rs 250 crore

– Warburg Pincus sale of their stake in Max India for an amount of Rs 246 crore

– TPG sale of their stake in Mahindra & Mahindra Finance for an amount of about Rs 123 crore.

🙂

Also read full report on the attachment:

http://www.moneycontrol.com/news_html_files
/news_attachment/2009/SMS%20report%20on
%20PE%20Exits.pdf

According to the SMC Capitals report, the capital market bounce starting April 2009 has seen several PE (Private Equity) funds selling their investments in the open market. The PE funds have sold from April 2009 till date, an amount to the tune of about Rs 1531 crore through bulk deals and block deals.

India May Trigger $39 Billion of Share Sales With Ownership Cap :)

India Shines

India may trigger as much as 1.9 trillion rupees ($39 billion) in stock sales, equivalent to five years of equity offerings, with a proposal to limit stakes of controlling shareholders.

🙂

Prime Minister Manmohan Singh’s government is considering a plan that would require at least 25 percent of a company’s stock to be traded.

🙂

The rule would prompt equity sales in 560 of Mumbai’s 3,335 most-active stocks, such as NMDC Ltd. and Steel Authority of India Ltd., according to data compiled by Bloomberg.

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The changes may encourage foreign investment by bringing Indian regulations in line with the U.S., U.K. and Hong Kong.

🙂

The 25 percent minimum would be good for the long-term Indian market. There are many very attractive companies with small floats that investors would like to be able to invest in.

🙂

The rule change would require the government, whose constitution embraces socialism, to reduce dominant stakes in key industries such as steel making, oil and electricity supply.

The top 10 companies that would have to sell stock are state- run, accounting for about 80 percent of the total by value.

🙂

Sensex Surges :

The Bombay Stock Exchange’s Sensitive Index, or Sensex, has climbed 61 percent this year, the eighth-best performer among 89 measures tracked by Bloomberg.

🙂

Growth in Asia’s third-largest economy may accelerate to 7.75 percent after the government initiated stimulus plans to bolster banks’ capital and spur consumer spending, according to the finance ministry.

🙂

International funds have bought 357.5 billion rupees of Indian stocks this year through Aug. 11, compared with record net sales of 530 billion rupees for all of 2008, according to data on the Securities and Exchange Board of India Web site.

🙂

The government plans to boost funding for a rural jobs program by selling shares in some state-run companies.

🙂

No Minimum :

Rules allow companies with a free-float worth at least 1 billion rupees to have as little as 10 percent traded, while there is no minimum for state-run enterprises, the ministry’s Web site says.

🙂

The Sensex has returned 192 percent over the past five years, second in Asia only to Indonesia.

Since 2005, companies have raised 1.89 trillion rupees in share sales, including 116 billion rupees in January last year by Mumbai-based Reliance Power Ltd. that marked the country’s biggest initial public offering.

New Delhi-based DLF Ltd., India’s largest real estate developer, sold 92 billion rupees of stock in June 2007.

🙂

Government Control :

India’s government plans to sell 8.38 percent of NMDC, the nation’s largest iron-ore producer.

The stake would fetch 120 billion rupees at current prices.

The government holds 98.4 percent in Hyderabad-based NMDC, and 85.8 percent of New Delhi-based Steel Authority of India, the nation’s second-biggest producer, according to Bloomberg data.

🙂

“The sheer magnitude of offloading involved may result in an overhang on the secondary capital markets,” Jagannadham Thunuguntla, the head of equities at SMC Capitals Ltd. in New Delhi, said in an interview.

“The capital market may find it difficult to absorb such heavy equity” he added.

🙂

The Securities and Exchange Board of India advocates “a phased approach, as companies may need time” to sell shares, N. Hariharan, a Mumbai-based spokesman for the market regulator, said in an e-mail Aug. 7.

🙂

‘Phased Manner’

The proposal “should be positive for markets if introduced in a phased manner,”

🙂

Such a change is a welcome one.

Ensuring a reasonable minimum float would help avoid share price manipulation, scams, abuse by majority shareholders, etc. This would constitute a positive structural change.

🙂

India may trigger as much as 1.9 trillion rupees ($39 billion) in stock sales, equivalent to five years of equity offerings, with a proposal to limit stakes of controlling shareholders.

Prime Minister Manmohan Singh’s government is considering a plan that would require at least 25 percent of a company’s stock to be traded. The rule would prompt equity sales in 560 of Mumbai’s 3,335 most-active stocks, such as NMDC Ltd. and Steel Authority of India Ltd., according to data compiled by Bloomberg.

The changes may encourage foreign investment by bringing Indian regulations in line with the U.S., U.K. and Hong Kong, said Anshul Krishan, the Mumbai-based head of Goldman Sachs Group Inc.’s India financing group. The sales, equal to about 4 percent of India’s $1 trillion stock market, probably won’t affect prices if they’re staggered over time, said Purav Jhaveri, senior investment strategist at Franklin Global Advisers.

“The 25 percent minimum would be good for the long-term Indian market,” Seth Freeman, chief executive officer of EM Capital Management LLC in San Francisco, which advises investors on emerging markets and runs the EM Capital India Gateway Fund, said in an e-mail response to questions. “There are many very attractive companies with small floats that investors would like to be able to invest in.”

The rule change would require the government, whose constitution embraces socialism, to reduce dominant stakes in key industries such as steelmaking, oil and electricity supply. The top 10 companies that would have to sell stock are state- run, accounting for about 80 percent of the total by value.

Sensex Surges

The Bombay Stock Exchange’s Sensitive Index, or Sensex, has climbed 61 percent this year, the eighth-best performer among 89 measures tracked by Bloomberg. Growth in Asia’s third-largest economy may accelerate to 7.75 percent after the government initiated stimulus plans to bolster banks’ capital and spur consumer spending, according to the finance ministry.

International funds have bought 357.5 billion rupees of Indian stocks this year through Aug. 11, compared with record net sales of 530 billion rupees for all of 2008, according to data on the Securities and Exchange Board of India Web site.

Finance Minister Pranab Mukherjee said in his July 6 budget speech that a rule requiring a public float of at least 25 percent for listed companies should be enforced uniformly, even for state-run enterprises that had been exempted. The government plans to boost funding for a rural jobs program by selling shares in some state-run companies.

No Minimum

Rules allow companies with a free-float worth at least 1 billion rupees to have as little as 10 percent traded, while there is no minimum for state-run enterprises, the ministry’s Web site says.

“The average public float in Indian listed companies is less than 15 percent,” Mukherjee said. “Deep, non-manipulable markets require larger and diversified public shareholdings.”

The Sensex has returned 192 percent over the past five years, second in Asia only to Indonesia. Since 2005, companies have raised 1.89 trillion rupees in share sales, including 116 billion rupees in January last year by Mumbai-based Reliance Power Ltd. that marked the country’s biggest initial public offering. New Delhi-based DLF Ltd., India’s largest real estate developer, sold 92 billion rupees of stock in June 2007.

Government Control

India’s government plans to sell 8.38 percent of NMDC, the nation’s largest iron-ore producer, Steel Secretary Pramod Rastogi said Aug. 5. The stake would fetch 120 billion rupees at current prices, he said. The government holds 98.4 percent in Hyderabad-based NMDC, and 85.8 percent of New Delhi-based Steel Authority of India, the nation’s second-biggest producer, according to Bloomberg data.

“The sheer magnitude of offloading involved may result in an overhang on the secondary capital markets,” Jagannadham Thunuguntla, the head of equities at SMC Capitals Ltd. in New Delhi, said in an interview. “The capital market may find it difficult to absorb such heavy equity.”

GMR Infrastructure Ltd., based in Bangalore, scrapped a $500 million international sale on June 30 as at least 40 companies announced plans to sell more than 350 billion rupees of shares, mostly to foreign institutional investors.

The Securities and Exchange Board of India advocates “a phased approach, as companies may need time” to sell shares, N. Hariharan, a Mumbai-based spokesman for the market regulator, said in an e-mail Aug. 7.

‘Phased Manner’

The proposal “should be positive for markets if introduced in a phased manner,” Franklin’s Jhaveri said in an e-mail response to questions. Franklin Templeton Investments in San Mateo, California manages $482.4 billion worldwide, including more than $3 billion in Indian stocks.

The Finance Ministry sought public comment on the plan on its Web site July 9. Singh’s administration plans to take up the issue after completing 100 days in office, Junior Finance Minister Namo Narain Meena said in a written statement to parliament in New Delhi on Aug. 4. Singh was sworn in on May 22.

The changes are important for protecting shareholders in India, said Andrew Foster, who oversees $2 billion in assets, including Indian securities, at Matthews International Capital Management LCC in San Francisco.

“Such a change is a welcome one,” Foster said in an e- mailed response to questions. “Ensuring a reasonable minimum float would help avoid share price manipulation, scams, abuse by majority shareholders, etc. So I think this would constitute a positive structural change.”

Adani IPO fully subscribed on day 1 – sources

Adani IPO fully subscribed on day 1 – sources

Adani Power Ltd’s initial public offering worth up to $623 million was fully subscribed within an hour of opening to investors on Tuesday, three sources involved in the deal said.

By 10:36 a.m (0506 GMT) the 301.65 million share offer was subscribed three times, mostly at 100 rupees, or the top end of the price range, said the sources who declined to be named.

The strong response will be encouraging to other Indian companies lining up share sales.

“Institutional money is driving it now. Retail will follow on seeing the tremendous response,” one source said.

The share offer closes on July 31.

On Monday sources said major U.S. funds T Rowe Price and TPG were among anchor investors who bought 52.85 million shares in Adani’s offering.

SMC Capitals Equity Head Jagannadham Thunuguntla who commented before the IPO openings that “Since the Adani Power IPO is being brought about by a big business house, a lot of investors are keeping their money aside to invest in it after the pre-IPO placement garnered a good response”  was proved right.

Indian firms have sold shares worth more than $7.5 billion so far this year, surpassing the full-year total of 2008, helped by a sharp rally in shares and rising foreign fund inflows.

Adani is the first large IPO in more than 18 months. Most share sales this year have been secondary offerings.

Nifty BeES ! (Nifty Benchmark Exchange Traded Scheme)

Nifty Bees

Nifty Bees

1. What is Nifty BeES?

Nifty BeES is an Open-Ended Exchange Traded Mutual Fund. It is a combination of a share and a Mutual Fund Unit. Nifty BeES tracks the S&P CNX Nifty Index.

The investment objective of Nifty BeES is to provide investment returns that, before expenses, closely correspond to the total returns of the S&P CNX Nifty Index.

Nifty BeES is listed on the Capital Market Segment of the NSE.

2. How is Nifty BeES different from Nifty Futures?


Nifty BeES & Nifty Futures both allow investors to take exposure to the Nifty Index. However, Nifty Futures are derivative products and trade in the F&O segment of NSE, while Nifty BeES is a cash product and trades in the Capital Market Segment.

Unlike futures, there is no lot size for Nifty BeES, you can buy as little as one unit.

As Nifty BeES is traded in the cash segment, you do not need to roll it over every month and can hold it as for long as you want. In terms of Taxation, with Index Futures it is not possible to take advantage of Long Term Capital Gains while with Nifty BeES you can take advantage of Long Term Capital Gains if you hold it for over a year.

3. Can one buy & sell any time during trading hours?

Yes, one can buy or sell Nifty BeES just like one buys or sells any other share. It trades on the capital market segment of NSE and is settled just like any other shares on T+2.
4. About Benchmark :

Benchmark Asset Management Company Pvt. Ltd. (BAMC) is a SEBI registered Asset Management Company launched in June 2001. BAMC is the first and only asset management company in India with a primary focus on indexing and using quantitative techniques in creating innovative products. Benchmark is run and co-promoted by professionals with a long experience in the Indian and International Financial Markets.
Benchmark Milestones


·First AMC in Asia (ex Japan) to launch ETF, and only 18th in the World

·Launched the First ETF in India – Nifty BeES

·Nifty BeES has been awarded the “Best Performing Mutual Fund of the Year in the index fund category at the CNBC-TV18-CRISIL Mutual Fund Awards in 2007 & 2008

·BAMC is the largest Index Fund Manager and the largest ETF manager in India

·BAMC was the first AMC to conceptualize the idea of a Gold ETF in the world

·BAMC has been ranked as the “Best Provider of Structured Products” in their Private Banking Poll 2006, by Euro money
Details of other ETFs:

·Nifty BeES: The First ETF in Asia (Barring Japan)

·Junior BeES: The First and only Midcap Index Fund and ETF in India.

·Bank BeES: The First and only Sector Index Fund and ETF in India.

·PSU Bank BeES: The First PSU Bank Sector Index Fund and ETF in India.

·Gold BeES: The First Gold ETF in India.

·Liquid BeES: The First and only Liquid ETF in the world

·Shariah BeES : First Shariah based ETF in India