Posts Tagged ‘shareholders’

Binani Inds to Buy Public Holding in Cement Unit

Binani Industries Ltd said on Wednesday it received board approvals to acquire the entire public holding in its unit Binani Cement, sending shares of both companies soaring.

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In a separate statement, Binani Cement said it will voluntarily delist equity shares from both BSE and NSE, after getting shareholders’ approval. Its shares rose as much as 20% on the news, while the parent’s stock rose 16%.

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Traders expect that the purchase price would be decided using a reverse book-building method, which pushed up the stock price, said Jagannadham Thunuguntla, equity head at SMC Capitals.

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In reverse book-building, shareholders can indicate the price at which they will tender the shares, he added.

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As on June 30, promoters hold 51.28% stake, while non-institutions hold 41.75%, institutions 6.97% and foreign institutional investors hold 2.10%, BSE data showed.

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Binani Group is into manufacturing of cement, zinc, glass fibre and downstream composites.

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Binani Industries would have to spend over Rs 700 crore to acquire the entire shareholding at the current share price, Thunuguntla said, adding that this would be part of Binani Industries internal restructuring plan.

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Shares of the Binani Cement closed up 14.41% at Rs 95.65, while that of Binani Industries closed 11.4% up at Rs 121.45 in a strong Mumbai market.

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Source:Moneycontrol

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Britannia Industries Rises on Fixing Record Date for Stock Split

Britannia Industries is currently trading at Rs 2,100.40, up by 23.45 points or 1.13% from its previous closing of Rs 2,076.95 on the BSE.

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The scrip opened at Rs 2,025 and has touched a high and low of Rs 2,139 and Rs 2,025 respectively. So far 7,512 shares were traded on the counter.

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The BSE group ‘B’ stock of face value Rs 10 has touched a 52 week high of Rs 2,380 on 05-Aug-2010 and a 52 week low of Rs 1,496.65 on 24-Sep-2009.

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Last one week high and low of the scrip stood at Rs 2,350 and Rs 2,025 respectively. The current market cap of the company is Rs 5,036.05 crore.

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The promoters holding in the company stood at 50.96% while Institutions and Non-Institutions held 27.47% and 21.58% respectively.

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Britannia Industries has informed that the company has fixed September 09, 2010 as the record date for ascertaining the shareholders of the company who will be entitled to receive five equity shares of the face value of Rs 2 each of the company in lieu of every one equity share of the face value of Rs 10 held by them in terms of the sub-division of shares approved by the shareholders of the company at the annual general meeting held on August 09, 2010.

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Union Cabinet Approved the Implementation of Guidelines on Corporate Governance

The Union Cabinet approved the implementation of guidelines on corporate governance for Central Public Sector Enterprises (CPSEs) from voluntary to mandatory basis.

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The official statement said, “The guidelines have now been made mandatory and are applicable to all CPSEs. They cover issues like composition of Board of CPSEs, audit committee, subsidiary companies, disclosures, Code of conduct and ethics, risk management and reporting,”

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PSUs will now have to compulsorily follow corporate governance norms as per a cabinet decision.

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An official close to the matter said, “The guidelines have now been made mandatory and are applicable to all central public sector enterprises (CPSEs). The guidelines cover issues like composition of board of CPSEs, audit committee, subsidiary companies, disclosures, code of conduct and ethics,”.

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These guidelines follow from the first draft of June 2007 which were modified as per the feedback received during the experimental phase.

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It includes additional provisions relating to monitoring the compliance of guidelines by the CPSEs and formation of remuneration committee, reports IANS.

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The statement says, “There was a continued need to adopt and apply the good corporate governance practices in respect of CPSEs where huge public funds are invested in the light of recent events in the corporate world,”

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According to statements issued, “NKN is expected to encourage a larger section of research and educational institutions to create intellectual property. Health, education, grid computing, agriculture and e-Governance are the main applications identified for implementation and delivery on NKN,”

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In the initial phase, a core backbone consisting of 15 PoPs have been established with 2.5 Gbps capacity. Around 40 institutions of higher learning and advanced research have been connected to the network and six virtual classrooms set up.

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The statement added that the guidelines have been modified and improved with the experience gained during the experimental phase and includes additional provisions relating to monitoring the compliance of guidelines by the CPSEs and formation of a Remuneration Committee.

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Further, it said that suitable modifications in the guidelines would be carried out to bring them in line with prevailing laws, regulations and acts, adding that it will facilitate protection of interest of shareholders and other stakeholders, and also ensure transparency in the operations of CPSEs.

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Other details:

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” The number of functional directors should not exceed half of the board”s strength and at least a third should be independent directors.

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” The audit committee of these companies should have a minimum of three directors as members and an independent director should head the committee.

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Additional provisions relating to the compliance of guidelines by government-run firms and the formation of a remuneration committee.

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” Remuneration of directors should be disclosed in the company”s annual report.

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Stay Tuned for More Updates :)

Domestic Economy Rolls as Corporate India Offers 40% More Bonus Shares

Domestic Economy Rolls as Corporate India Offers 40% More Bonus Shares

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Issue of bonus shares by Corporate India to its shareholders in the first 10 months of the fiscal has shot up 40% over the total during the fiscal ended March ‘09, after declining for two straight years.

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This interesting jump in bonus issues indicates positive sentiment of the corporate sector to serve a larger equity base.

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Companies like Britannia, TCS, Reliance Industries, Adani Enterprises, Jindal Steel, Divi’s Lab, JP Associates etc  have  issued bonus shares in the April ‘09-January ‘10 period.

There are as many as 61 companies which have done so.

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Jagannadham Thunuguntla, equity head with Delhi-based merchant bank SMC Capitals, said:  “The increase in companies doling out bonus equity to its shareholders reflects that the domestic economy is on the path of recovery.”

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Corporate India has got the confidence to expand equity capital base and issue bonus shares owing to the fact that they have performed very well this fiscal.

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Bonus issue is an offer of free additional shares to existing shareholders.

This is one of the ways of rewarding shareholders, who largely benefit from capital gains.

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A company may decide to distribute further shares as an alternative to increasing the dividend payout.

It is also known as a “scrip issue” or “capitalization issue”.

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The number of companies issuing bonus shares declined more than a quarter after hitting a peak in 2006-07 to 72 firms in 2007-08 and shrunk further to just 44 companies for the year ended March ‘09.

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This came after three consecutive years of rise in number of bonus issues, when more listed firms announced a bonus bonanza in line with the bull run of the stock market.

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Bonus shares are issued by companies through capitalization of their free reserves.

When a company announces bonus issue, it is an indication of its management’s confidence to serve a larger equity base.

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🙂

SEBI Allows Auctions for QIBs in FPOs :)

SEBI Allows Auctions for QIBs in FPOs

Market regulator, SEBI has introduced a significant change in the way institutional bidders invest in follow-on public offers by allowing allotments through auctions.

 

The Securities and Exchange Board of India (Sebi) has amended the Issue of Capital and Disclosure Requirements Regulations (ICDR) to allow pure auctions for qualified institutional investors (QIBs) in follow-on public offerings to begin with.


The method may be later extended to initial public offerings.

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Under the new method, bidders will be free to bid at any price above the floor price.

At present, allotments are made at the floor price.

Retail investors, however , will be allotted shares at the floor price.

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The board also decided that the issuer is free to place a cap either in terms of the number of shares or percentage to issued capital of the company so that a single bidder does not garner all the shares on offer, ensuring a wider distribution of shareholding.

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Jagannadham Thunuguntla, Equity Head,  SMC Capitals, said this means an institutional investor can continue to bid above the floor price and the QIB allotment will be made to the highest bidder.


“The intent is to enable companies to mop up more funds. Earlier, even when there were huge subscriptions and huge demand for an issue, the company could not get more money. This becomes more relevant in the context of the recently announced divestment plans and FPOs by the government for public sector units,” he said.

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Auction for QIBs is welcome as it would allow risk-taking entities and not just the promoters to be a part of the price discovery process, other analyst said.


A SEBI release issued after the board meeting also said the minimum market capitalisation required by listed firms to sell shares in follow-on offerings has been halved to Rs.5,000 crores  from Rs 10,000 crore.

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Moreover, the market regulator has also made it a mandatory that all listed companies would have to furnish audited or un-audited balance sheets on a half-yearly basis within 45 days from the end of the quarter instead of the current yearly basis.

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This would imply that Indian companies will be required to disclose balance sheet items.


Shareholders would be able to access the statement of assets and liabilities of the company and its solvency position on a half-yearly basis.


Shareholders would receive immense help in making informed investment decisions now and would be in better position to assess the financial health of the companies, with the implementation of this SEBI regulation of mandating frequent disclosure of the asset-liability position of companies by companies.

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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.

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Corporate India Mobilized Rs 21k crore through Share Sale :)

India Inc has mobilised over Rs 21,000 crore through share sale to institutional investors in the past six months

India Inc has mobilised over Rs 21,000 crore through share sale to institutional investors in the past six months

India Inc has mobilized over Rs 21,000 crore through share sale to institutional investors in the past six months, which is nearly half the amount proposed to be raised by these companies.

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According to data compiled by SMC Capital, during the period starting March 2009, Indian corporates raised about Rs 21,377 crore through 29 Qualified Institutional Placement (QIP) issuances.

“The companies are preparing for a second round of institutional placement.

The firms which have not raised the amount they had proposed initially is most likely to launch another QIP issue,” SMC Capital Equity Head Jagannadham Thunuguntla said.

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Despite the fact that Indian corporates were quite aggressive in QIP fund raising in the past six months, on an average they raised only 48.63 per cent of the amount approved by their board or shareholders, he said.

Early this year, India Inc announced intentions for raising funds through QIP, as all possible sources of fund raising dried up.

Of the total fund raised thorough the QIP route in the past six months, over Rs 10,300 crore, comprising nearly half of the total amount raised, has been mobilised by the cash-starved real estate companies, including DLF, Unitech and Indiabulls Real estate.