Posts Tagged ‘share sales’

Record Fund Raising by India Inc,through QIPs, is on the Cards.


Record Fund Raising by India Inc,through QIPs, is on the Cards

Record Fund Raising by India Inc,through QIPs, is on the Cards



Indian companies are all set to  raise record fund through share sales to institutional investors in the next few months as they attempt to reduce debt accumulated during their takeovers.

Hindalco, Aban Offshore and Tech Mahindra, which bought the scandal-hit Satyam Computer, will lead this record fund raising by India Inc.

Indian companies have approvals from shareholders to raise as much as Rs 68,000 crore by selling shares to institutional investors under the so-called qualified institutional placement route.

This is in addition to around Rs 26,000 cr that has been raised by companies such as real estate developer Unitech and Suzlon Energy in the last six months, thanks to the signs of economic revival and  record stocks rally.

India Inc raised as much as Rs 26,430 cr in the last thirty-six QIP issues since March this year, according to the analysis.

These companies which raised funds in the last six months still have room to raise another Rs 23,000 cr based on the approvals shareholders have given them.

There are several companies which have received approval for QIPs between June and October with a potential to raise as much as Rs 44,000 crore, but are yet to hit the market.

Hindalco, which is saddled with debt after it acquired Canada’s Novellis, plans to raise Rs 2,900 crore and Tech Mahindra plans to raise to partly repay the loan it took to buy Satyam Computer.

Essar Oil which is negotiating to buy Shell’s refineries in the UK plans to raise around Rs 9,000 cr, whereas JSW Steel has a mandate raise Rs 4,853 cr.

Shareholders’ approval is valid for a year and most of these companies took approval after June this year.

“The issues that have come till now got strong interest from institutional investors, and predominantly from foreign buyers who bought over 90% of the QIP issues.  Given the current market conditions and the kind of interest that Investors displayed in the Indian growth story, the proposed issues should be subscribed successfully,” said Jagannadham Thunuguntla, equity head, SMC Capitals.

The fund raising gets bigger when one takes into account the potential IPOs and government share sales which may run into billions of dollars more.



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.