SEBI investigates structured deals in IPO allotments

The Securities and Exchange Board of India (SEBI) is investigating all public issues in the past three months after it found in the offering of Nissan Copper that allotments and subsequent sale of shares to some foreign institutional investors (FIIs) were actually structured deals. It has been discovered that at least three portfolio investors have sold all the shares they purchased in the IPO on the first day of their listing. SEBI was also looking at the role of merchant bankers in these issues. SEBI investigators have also asked stock exchanges for details of public offers and first few days’ trading of Shree Ashtavinayak Cine Vision, Minar International, and Cairn India. The regulator is probing whether merchant bankers or the companies themselves helped some investors to use the FII route to corner shares without directly participating in the IPO process.

Read the complete article in The Times of India.

IFC to invest $300 mn in Indian ultra-mega projects; in talks with Tata Power

World Bank private equity arm, the International Finance Corporation (IFC), is in talks with Tata Power for providing long-term debt funding, along with other major ultra-mega power projects. Funding would be in the range of $200-300 mn. IFC is also looking at other infrastructure projects, especially in the road sector.

IFC is also looking at picking up equity stake and upper Tier-II instruments in the banking sector. It has recently invested $150 mn in ICICI Bank’s upper Tier-II bonds and $100 mn in HDFC Bank’s similar issue, and is open to more such investments in banks which will help them meet their capital requirements.

IFC already has a big-ticket exposure of over $100 mn in Tata Steel and Cairn Energy. It also has an RBI approval for raising $1 bn-equivalent of rupee funds. IFC has the fourth-largest exposure to India after Russia, Brazil and Turkey.

Read the article in The Economic Times.

Cairn India fixes issue price at Rs. 160

Cairn India, a crude oil and natural gas exploration and production company, has fixed its issue price at Rs. 160 per share. The low pricing is due to uncertainty in market conditions, and consequent weak response from investors. The company will now have to return nearly Rs. 335 crore to private equity investors, (PE) for pre-IPO placement done at Rs. 176 per share. The issue was oversubscribed just 1.14 times with QIBs portion subscribed 1.36 times, HNI 0.47 times and Retail 0.9 times. The company entered the capital markets with a public issue of 328 mn equity shares of Rs. 10 for cash at a premium to be decided through a 100% book-building process. DSP Merrill Lynch, ABN-AMRO Securities and JM Morgan Stanley were the book running lead managers.

Read Moneycontrol.com for more details.