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(The indu Business Line 11th May 2008) Investors can consider subscribing to the IPO from Gokul Refoils and Solvents in the price band of Rs 175-195, at the cut-off price. The asking price for the offer appears reasonable in relation to listed peers as well as the company’s own financials and growth prospects. At Rs 195, Gokul Refoils would be valued at a price-earnings multiple of about eight times its estimated FY08 earnings and at about six times FY09 earnings, using conservative assumptions, on the diluted equity base. Solvent extraction and edible oil players of a similar or much larger size such as Agro-Tech Foods and Ruchi Soya trade at valuations of 11-15 times current earnings. The company’s expansion projects are likely to scale up contributions from the current fiscal. However, the offer is suitable only for investors with a high risk appetite, as the edible oils business is characterised by thin margins and is exposed to commodity price fluctuations as well as policy change...

ICICI Securities, the investment banking arm of ICICI Bank, would come out with initial public offer in due course, said the CEO of ICICI Mr K V Kamath. "The IPO will come in due course. We are not in a hurry," said Mr Kamath. He said the bank has not decided on the size of the IPO and when the market conditions are favourable, the bank would consider the IPO. In January, the board of ICICI Securities had approved the initial public offer and private placement of shares to one or more institutional investors. Soon after the decision, ICICI Bank Joint Managing Director and CFO Ms Chanda Kochhar had said, the sh ares of ICICI Securities would be listed on the bourses in about six months. The board had decided to offload 15 per cent of its shares to retail or institutional investors. ICICI Securities, having an equity capital of Rs 61 crore, is a major player in retail broking and has posted revenues of Rs 527 crore during the first nine months of the current fiscal while profit...

Twenty IPOs hit SEBI clarification hurdle Market regulator SEBI has sought 'clarifications' on proposed initial public offers of as many as 20 companies, including the likes of leading commodity bourse MCX, Mahindra Holidays, Oil India and Anil Ambani group's telecom tower business arm R eliance Infratel. Besides, at least 21 other IPOs are currently awaiting the clearance from Securities and Exchange Board of India, which includes 15 offers, whose bankers have replied with clarifications sought from them. While some bankers said that responses to the SEBI are being delayed deliberately in some of the cases in view of the turbulent market conditions prevailing on the bourses, those associated with some of these deals said these are 'routine' clarifications and would be responded in the due course. According to the latest processing status as on March 14 of draft offer documents filed with SEBI, clarifications are currently awaited from lead managers in relation to 2...

Companies shelve capital market plans (Live mint.com 17th March 2008)The meltdown in the equity markets has taken its toll on the capital raising plans of Indian firms. Investment bankers estimate that at least 13 Indian companies have stalled plans of raising nearly Rs25,000 crore from the equity markets and say this could just be the beginning of the trend. “More and more companies that had announced plans to raise money are adopting a wait and watch policy,” said Girish Nadkarni, executive director, Avendus Capital, a domestic investment bank. India’s bellwether stock market index, the Sensex, has dropped around 26% from its peak this year, eroding Rs19.5 trillion in market capitalization. There has been a 19% decline in equity capital market activity across Asian markets, between January and March, as indicated by public offerings, follow-on issues and equity-convertible issuances, according to Thomson Financial. Most of the Indian firms that have scrapped their plans were plannin...

Ratnagiri Gas and Power Pvt (RGPPL), the erstwhile Dabhol project, could tap the capital market by the end of this year. RGPPL is planning an IPO to raise Rs 1,000 crore. Currently, RGPPL’s total equity capital base is Rs 4,000 crore. Out of Rs 4,000 crore, promoters GAIL, NTPC, Maharashtra State Electricity Board and financial institutions have, so far, contributed Rs 2,985 crore and the balance is to be raised through the IPO, he said. The company plans to use the IPO proceeds to repay the debt it has taken from Power Finance Corporation (PFC) and NTPC. The company has taken Rs 350 crore loan from PFC for completion of the power plant and LNG import terminal. NTPC had also sanctioned Rs 500 crore loan, of which Rs 150 crore has been drawn. The board of the company is expected to consider the change in status at its meeting on March 20. He also said that post-IPO, a private placement of Rs 500 crore is possible wherein the lenders to the power plant may convert their debt into equity....

Think twice before investing in IPOs (The Economic Times 27th Feb 2008)Ten out of 16 initial public offerings (IPOs) that made their debut on the bourses this calendar year are quoting below their issue prices, a statistic that is likely to make investors think twice before rushing to put money into the next ‘hot IPO’. But merchant bankers are not to be dissuaded so easily. They feel the primary market is showing signs of a revival, only that investors have become a bit more finicky about the price they are willing to shell out. “People are coming back but at a price,” said an investment banker with a leading domestic brokerage. “Unlike the earlier trend of where any issue was oversubscribed, there is an element of caution today. In a highly volatile market, most investors prefer secondary market trade rather than primary market trade,” he added. Industry experts aver the new issuances and their performance on the bourses in the recent past also need to be judged against the backdrop ...

IPO of Rural Electrification Corporation (REC) got subscribed by over 14 times of the issue size, as per the data available with the NSE at 1400 hrs. The IPO received bids for 219.65 crore equity shares, against 15.61 crore shares on offer. The issue, expected to raise Rs 1,640 crore, closes for subscription on Friday. The company's maiden public offer got subscribed 4.13 times of the issue size till yesterday, with most of the bids pouring in from institutional investors. REC has fixed the price band for the issue at Rs 90-105.

Cochin Shipyard plans public issue for funding expansion (Live mint.com 21th Feb 2108)The Union government-owned Cochin Shipyard Ltd plans an initial public offering (IPO) to fund an expansion plan even as the country scales up its shipbuilding capabilities to tap into a global boom in the business. The plan involves building a new dry dock, which typically costs Rs800-1,000 crore. A dry dock is a narrow basin that can be flooded to allow a ship to be floated in, then drained to allow that ship to come to rest on a dry platform. Dry docks are used for the construction, maintenance and repair of ships. “We have submitted a proposal to the shipping ministry for constructing a new dry dock at the yard which could be funded through a sale of new shares to the public,” said a company executive, who did not want to be named because he is not authorized to speak to the media. If and when the ministry clears the proposal, Cochin Shipyard will become the first state-owned shipbuilding yard to ...

MCX files draft IPO prospectus (The Economic Times 19th Feb 2008)Multi Commodity Exchange of India Ltd, the country's leading commodity bourse, today filed a draft prospectus for its initial public offer with the market regulator SEBI. In a stock market filing, Financial Technologies India Ltd, the bourse's parent company, today said that it has filed the Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India in connection with the proposed IPO of MCX. More

REC: Invest at cut-off (The Hindu Business Line 19th Feb 2008) REC’s robust financial profile and attractive pricing make this offer commendable to investors. Investors can subscribe to the initial public offering of shares by Rural Electrification Corporation (REC) at the cut-off price. REC’s business is sharply focussed and the company has a robust financial profile despite difficult clients such as State electricity boards (SEB) and other power utilities. Importantly, at Rs 90-105, the offer is priced attractively and leaves enough on the table for investors in the medium term. Investors should not subscribe in anticipation of listing returns. REC’s original mandate was to enable electrification of Rural India through financing of transmission and distribution (T&D) projects and the energisation of agricultural pumpsets. However, the company has now evolved to finance all segments of the power sector throughout the country, including generation projects. The company’s clients ar...

L&T puts IT arm's IPO plan on hold (The Economic Times 15th Feb 2008)L&T Infotech, the IT arm of engineering major Larsen & Tubro, has put its IPO plan on hold citing unfavourable market conditions. A senior company official said the company could issue shares to promoters to raise money if and when needed. The company had earlier announced its plans for a listing in the latter half of 2008. Speaking to ET on the sidelines of the Nasscom summit, chief executive and member of board at L&T Infotech, Vijay Magapu, said: “Although we have the intention of doing an IPO, the market conditions are not right just now. While the preparation for the IPO is on within the company, the time for hitting the capital markets could be extended considering that P/E ratios of many listed IT companies have fallen in the recent market correction, apart from other factors like the rising rupee and the non-extension of the STPI regime.” Instead, the company is known to be looking at grow...

Conflicting signals from govt ahead of REC initial public offer (Live mint.com 14th Feb 2008)Key functionaries of the government, which owns Rural Electrification Corp. Ltd (REC), sent out conflicting signals about the company’s planned share sale in the wake of uncertainties in the markets that have already scuttled two recent, high-profile initial public offerings (IPOs)—those of developer Emaar MGF Land Ltd and health-care firm Wockhardt Hospitals Ltd. While Union power minister Sushil Kumar Shinde said the government would “watch the market for the next two-three days” before taking a decision, power secretary Anil Razdan said the government was “not considering any postponement” of the issue. Shinde did not elaborate on the government’s possible course of action, but said he was not denying the possibility of extending the dates of the IPO. “We will examine whether the time is right for the issue.” REC is one of the country’s largest lenders to the power sector. It plans to sell ...

SVEC Constructions IPO to be withdrawn (The Hindu Business Line 13th Feb 2008)The list of the casualties seems to be growing on the IPO front. The lead mangers of Hyderabad based SVEC Constructions Ltd have decided to withdraw the IPO, which was to close on Wednesday. As on 5 p.m. on Tuesday, the issue was subscribed only by 25 per cent. The company had reduced the price band and extended the deadline. Last week, two high-profile IPOs – Emaar MGF and Wockhardt – were called off following poor investor response. Analysts said that these IPOs failed due to aggressive pricing and the current market sentiments. Amidst the chaos, some companies are still willing to take a chance to go ahead with its issues. GSS America Infotech Ltd went on with its IPO as planned. The issue opened on Monday and is expected to close on February 15. The company is offering a total of 34.9-lakh equity shares to the public and the price band is fixed between Rs 400 and Rs 440. As per the latest data available o...

Big power IPOs face rough pitch (Business Standard 12th Feb 2008) The tide seems to have turned for companies wishing to tap the capital market, if the withdrawal of Emaar MGF and Wockhardt Hospitals’ initial public offers (IPO) and the lacklustre debut by Reliance Power is any indication. Half of the ten IPOs to have hit the market since the beginning of this year have been from the real estate space. J Kumar Infra Projects, KNR Constructions, SVEC Constructions and the now withdrawn Emaar MGF are the worst hit, according to analysts. Big ticket primary offerings from Sterlite Energy, GMR Energy and JSW Energy are also expected to have a tough time following the lacklustre debut by Reliance Power on the bourses. ome other big IPOs expected in the coming months are the Bombay Stock Exchange, National Stock Exchange and MCX issues. “The withdrawals by Emaar and Wockhardt will certainly affect sentiment in the primary market. However once the secondary market stabilizes, quality issues w...

IPOs: All that glittered (Business Standard 12th Feb 2008) Most market players point at grossly over-rated valuations based on earnings projected many years in the future. The great Indian IPO fallout continues, as the Reliance Power’s IPO, priced at Rs 450 per share and which got oversubscribed 73 times, tanked as low as Rs 355.05, after listing at Rs 530 and touching even a high of Rs 599.90. While the stock finally closed at Rs 372.50 on the Bombay Stock Exchange, investors have been hit hard. Not only have they lost a part of their capital, but those who took a loan to subscribe to the issue have lost a greater amount. Although Reliance Power, which is the largest initial public offering (Rs 11,700 crore) so far on the Indian bourses, managed to evince spectacular interest, the shift in investor sentiment surfaced when meagre subscriptions to the Emaar MGF Land and Wockhardt Hospitals’ IPOs forced them out of the markets last week. While the overall market sentiment has turned weak...

Rel Power trades at discount in early trades (Business Standard 11th Feb 20011)Reliance Power, subsidairy of Reliance Energy, today listed at Rs 548 - a premium of 27.4% to its issue price of Rs 450 - on the Bombay Stock Exchange (BSE).The stock touched a high of Rs 600, and a low of Rs 401, and is trading at Rs 404 - a discount of nearly 11% - in early trades.Meanwhile, the BSE index, Sensex has slipped 296 points to 17,169.Reliance Power IPO was subscribed approximately 70 times and attracted over 5 million bids from all categories of domestic and international investors with aggregate commitment of over Rs 7,50,000 crore, as against the issue size of Rs 11,560 crore. More

The company today said the application money would be refunded in 10-15 days.Emaar MGF would now look at private placement and private equity deals at the special purpose vehicle (SPV) level.The IPO, which was initially expected to raise over Rs 7,000 crore in a price band of Rs 610-690 per share, was extended and the offer price cut twice to Rs 540-630 per share initially and finally to Rs 530-540 per share.

Rural Electrification Corp IPO to raise up to Rs 1,640 cr (The Hindu Business Line 8th Feb 2008)State-owned Rural Electrification Corporation proposes to raise up to Rs 1,640 crore through an initial public offering of 15.61 crore equity shares. The IPO opens on February 19 and closes on February 22. The price band has been set at Rs 90-105. At the lower end of the band, the company will raise Rs 1,400 crore and at the cap Rs 1,640 crore. Half of the shares on offer constitute a fresh offer of equity while the other half is being divested by the Government. There is a reservation of 39 lakh shares for employees at issue price. The offer constitutes 18.1 per cent of the company’s post issue paid-up capital, said Mr Anil Kumar Lakhina, Chairman & Managing Director, at a news conference on Thursday. REC is a State-owned ‘mini-Ratna’ company. It lends to power projects, chiefly to State-owned power units but also to private companies, in transmission and distribution, power generation,...

Wockhardt Hospitals pulls out IPO; refund in 15 days (The Hindu Business Line 8th Feb 2008)After a jittery start in late January, Wockhardt Hospitals Ltd’s IPO eventually succumbed to the volatility in the stock markets. The hospitals major on Thursday officially withdrew its IPO due to feeble response from investors. Wockhardt Hospitals’ IPO was subscribed 0.20 times, receiving 49,03,440 bids, on the day of the IPO’s closing. And “no comment” was all that Wockhardt Chairman, Mr Habil Khorakiwala, was willing to say, when queried by newspersons at a pharmaceutical conference earlier in the day. A company statement, however, said that Wockhardt Hospitals had indeed decided not to proceed with its proposed IPO of 25,087,097 equity shares constituting 24.06 per cent of the proposed post-issue paid-up equity share capital of the company. “The decision not to proceed with the IPO was made in light of continued global and domestic market volatility and poor market sentiments and the resultan...

Emaar extends IPO; price band cut again (The Hindu Business Line 6th Feb 2008)The IPO of Emaar MGF Land Ltd, which was slated to close on Wednesday, has been extended by five days, and its price band revised downwards for the second time. This was as a result of the IPO failing to fetch the minimum required subscription of 90 per cent. As at 5 p.m. on Wednesday, the subscription was only 75 per cent, the NSE data showed. Also, the maximum bids were at the lower end of the price band. The company has now refixed the lower end of the price band at Rs 530, from Rs 540 earlier, retaining the upper end at Rs 630. This is the second revision in this IPO’s price band, which was originally Rs 610-690. The issue was subscribed 0.64 times by qualified institutional buyers, a marginal 0.0041 times by non-institutional investors and 0.0513 times by retail individual investors. More