Andhra state government housing firm Deccan Infra to list; to raise Rs. 2000 crores

Andhra Pradesh Housing Board (APHB) subsidiary, Deccan Infrastructure & Land Holdings Limited (DILH) will raise up to Rs. 2000 crores through an initial public offering, most likely to come out in June – July. The company will divest 15-20% equity. The Government of Andhra Pradesh holds 49% equity and the APHB 51% in DILH. Deccan Infra is into the development of integrated townships and urban infrastructure either on its own or through JVs with other public bodies and private-sector companies. The managers to the issue are JM Morgan Stanley, DSP Merrill Lynch and SBI Capital Markets.

Based on the track record of its parent and armed with a land bank of about 8000 acres, Deccan is valued at over Rs. 12,000 crores on the lower side. Property consultants Trammell Crow Meghraj and Cushman Wakefield are carrying out a valuation exercise on the land bank.

Read the article in DNA Money.

The Adani Group plans Rs. 1500 crore-IPO for Mundra Port and SEZ

Adani group company Mundra Port and Special Economic Zone Limited will raise money from the capital markets. It has filed a draft red-herring prospectus with SEBI. The issue size of the company would be around Rs. 1500 crores. The IPO is expected to hit the capital market between last week of May and first week of June. The Adani Group has appointed DSP Merrill Lynch, JM Morgan Stanley, SSKI, Enam Financial and SBI Capital Markets as their lead managers to the issue. Mundra Port and SEZ is the first company from the SEZ and the port sector to hit the capital markets. The proceeds of the issue would be utilized for the further development of the Mundra port and SEZ.

Read The Economic Times article.

JM Financial and Morgan Stanley to go separate ways

In one of the biggest developments to have happened in the Indian investment banking space, the JM Financial Group and Morgan Stanley have called it quits on their Indian joint venture JM Morgan Stanley, one of the most prominent names in the investment banking and securities broking businesses in India. The joint venture, inked in 1997 and formalized in 1999, established a pre-eminent investment bank, equity broking, research, wealth management and advisory and securities distribution operations in India during the decade long relationship.

JM Financial will acquire the 49% holding of Morgan Stanley in JM Morgan Stanley, which along with the investment banking business will also include its subsidiaries engaged in fixed income, equity broking, wealth management, advisory and distribution businesses of the joint venture at around book value for $20 mn (approximately Rs. 88.5 crores). JM Financial will simultaneously sell to Morgan Stanley, their 49% holding in JM Morgan Stanley Securities, the institutional equity broking business for $445 mn (around Rs. 1970 crores).

The transaction is expected to close by the first quarter of FY2007-08.

MindTree Consulting IPO opens on Feb 9; priced at Rs. 365 – 425

MindTree Consulting Limited, an IT services company, is coming out with its maiden public offering of its equity shares, which opens on February 9, 2007 and close on February 14, 2007. The company proposes to offer 55.9 mn equity shares of Rs. 10 each at a price band of Rs. 365/- to Rs. 425/- per equity share through a 100% book building process method. The issue will constitute 15.00% of the post-issue capital of the company. Kotak Mahindra Capital, JM Morgan Stanley, JP Morgan and Macquarie are the managers to the issue.

MindTree is organized into two divisions – IT Services and R&D Services. IT Services comprise IT strategic consulting, application development and maintenance, package implementation and product engineering services. The IT Services business unit offers such services mainly to industries such as manufacturing, travel and transportation, banking, financial services and insurance. R&D Services are organized into two divisions – Engineering, which provides product realization services including architecture and design, re-engineering and product assurance to technology and product firms; and Research, which conceives and develops intellectual properties, primarily in the short-range wireless communication segment and licenses and customizes such intellectual properties for clients.

Read the press release here.

In a related development, MindTree is about to acquire a domestic semiconductor design company in an all-cash deal. The target company is reported to employ around 200 people. It has a sales presence in the US and a delivery centre in India. MindTree has signed a non-binding term-sheet with this firm and due diligence is on. It expects the acquisition to add to its IC (integrated chip) design capability and will also bring in new customers. This will be MindTree’s third acquisition in its seven-year history. The company had earlier made two acquisitions, the software division of ASAP and its subsidiary in September 2004 and Linc Software Services in June 2005.

Read the article in Business Standard.

Cinemax India Limited IPO priced at Rs. 135 to Rs. 155

One of India’s leading theatre chains, Cinemax India Limited, is coming out with an Initial Public Offering (IPO) with an issue of 8.92 mn shares of Rs. 10 each at a price band of Rs. 135 – Rs. 155 per share. The issue comprises a fresh issue of 7 mn shares and an offer for sale of 1.92 mn shares by existing shareholders. The net issue will constitute 31.86% of the fully diluted equity share capital of Cinemax India Limited.

The capital raised from the issue will be deployed to set up several theatres in various locations across India. As a part of their expansion plans, over the next two years, they propose to set up 19 theatres at identified key locations in which a total seating capacity of approximately 15,864 seats will be created.

Enam Financial Consultants Private Limited, JM Morgan Stanley Private Limited, Edelweiss Capital Limited and Ambit Corporate Finance Private Limited are the Book Running Lead Managers to the IPO. The shares will be listed on The Bombay Stock Exchange and The National Stock Exchange of India.

Read the press release here.

Mitsui’s 51% stake in Sesa Goa up for sale

Sesa Goa’s 51% stake held by Mitsui Corp. through its subsidiary Finsider International is up for sale. Major companies such as Arcelor-Mittal, Sterlite Industries, mining major BHP Billiton are interested in buying out Mitsui Corp. Bids from interested companies have been sent to JM Morgan Stanley, Mitsui’s advisor for the deal and are scheduled to close on Thursday.

Large-scale Indian steel players such as Tata Steel and JSW Steel, mining firm MSPL, global mining majors CVRD and Rio Tinto and the Aditya Birla group are some of the other names that are doing the rounds for bidding.

The Goan company has already attracted good interest among foreign investors, with US-based pension fund CalPERS (Californian Public Employees Retirement System) owning about 1.44% in Sesa Goa.

Read The Economic Times article.

Top investment banks back out of DLF issue

Two of the book running lead managers (BRLM), involved in the mega-IPO of real estate behemoth DLF have backed out of managing the issue. Enam Financial Services and JM Morgan Stanley seemed to disagree over valuations of the company with the DLF management, and have withdrawn from managing the issue. They have been replaced Lehman Brothers and Deutsche Equities, as per the revised prospectus filed with the Securities and Exchange Board of India (SEBI).

Nimish Kampani, CMD, JM Morgan Stanley, also happens to be a member of the SEBI’s capital markets committee.

Kotak Mahindra Capital and DSP Merrill Lynch have been retained as the global coordinators for the issue, so have been Citigroup, ICICI Securities and UBS AG as the other book-running lead managers for the issue. SBI Capital Markets is the co-book runner for the IPO.

This is the second time in which investment banks have backed out of an IPO. Earlier, during the IPO of low-cost airline operator Deccan Aviation, the BRLMs SBI Capital Markets, JP Morgan and ABN-AMRO Rothschild had backed off, citing differences over valuation. The issue was finally handled by Enam Financial Services and ICICI Securities.

Read the Business Standard article.

Ambani goes for the kill, to buy out Ruia’s stake as well

Finally, Anil Ambani has made his intentions absolutely clear. Reliance Communications will buy out Hutch-Essar in its entirety. Nimesh Kampani, representing the Ruias is believed to have held meetings with Anil Ambani. Various parties as interested in buying out Hutchison’s stake in Hutch-Essar are doing the rounds of investment circles. These include Ruias themselves raising debt from banks and buying Hutch’s stake in the JV. Bharti’s Mittals are also heard to be interested in buying out the company. Even the name of the Tatas has been mentioned. Maxis, the Malaysian telecom company, is also set to bid for Hutch-Essar. The Ruias stand to gain around $4-5 bn if they sell their stake to Reliance Communications. Ruias are being advised by Morgan Stanley and Goldman Sachs. UBS is advising Ambani on the deal. Buyout funds like Blackstone, Texas Pacific, Carlyle and Kohlberg Kravis Roberts, among others, are supporting Reliance to structure the financing. With about $10 billion through cash to buy equity and around $2-4 billion as debt from major foreign banks, Reliance seems to be the frontrunner in getting the Hutch-Essar telecom business.

Read the article from Business Standard.

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.