SBI Capital Markets tops Lead Manager rankings

State Bank of India’s i-banking unit SBI Capital Markets has been ranked as the top mandated lead arranger and advisor in the Asia-Pacific region by Project Finance International (PFI) for the year 2006. SBI Caps has also been ranked 9th and 3rd globally in the ‘Project Finance Arranger’ and ‘Project Finance Advisory’ categories, respectively, in 2006 by PFI. It is the only Indian investment bank to figure among the top 10. Leading global data, news and analytics provider Bloomberg has also ranked SBI Caps as the No. 1 Mandated Arranger for the second year in a row.

Read the Business Standard article.

SBI to raise $700 mn from markets overseas by March 2007

The State Bank of India will raise $700 mn by March through placing long- and medium-term bonds overseas. The bank may also go for a follow-on public offer in 2007-08. The borrowing is part of the $2 bn medium term note programme of SBI. It has hired Barclays and Citigroup to sell dollar-denominated bonds. Deutsche Bank and HSBC will also manage the sale. The four banks will also arrange a sale of five-year notes. The bank is raising funds to meet new Central bank rules on capital levels and meet demand for loans. The Reserve Bank of India (RBI) on 21 July permitted banks to increase capital by selling debt overseas. SBI last month increased $300 mn of bonds it sold in December to $500 mn.

Read the Business Standard article.

SBI, IDBI and others to sell 11% stake in NSE

State Bank of India along with Indian Overseas Bank, Union Bank of India, Corporation Bank and IDBI are looking to sell upto a combined 11% stake in the National Stock Exchange. This follows the sale of a 20% stake by five other leading financial institutions in the exchange.

Several private equity players such as Blackstone and Actis have shown interest in buying the stake. Earlier, the New York Stock Exchange (NYSE), Goldman Sachs, General Atlantic and Softbank Asian Infrastructure Fund bought 5% each in NSE from a consortium of five domestic financial institutions. IFCI sold 7% for Rs. 779 crores, while both ICICI Bank and IL&FS divested 5% each for around Rs. 550 crores. GIC sold 2% for Rs. 205 crores and PNB sold 1% stake for Rs. 102 crores. The sudden interest in NSE from foreign players comes after the Reserve Bank of India allowed foreign investment of up to 49% in stock exchanges, fixing the foreign direct investment cap at 26% and foreign institutional investor limit at 23%. Rules stipulate that no single entity can hold more than 5% in a stock exchange.

Read the Business Standard article.
Related Post: NYSE, Goldman Sachs, General Atlantic, SAIF to buy 26% in NSE

RBI to divest its stake in SBI to the Indian Government

The Union Cabinet has approved the transfer of Reserve Bank of India’s (RBI) shareholding in State Bank of India (SBI) to the Indian Government by June 2007 with a view to let the RBI focus exclusively on regulation, the Cabinet has also assented for the transfer of RBI’s stake in the unlisted National Bank of Agriculture and Rural Development (NABARD) and National Housing Bank (NHB) to the government at book value by June 2008.

The estimated acquisition cost of RBI’s 59.7% stake in SBI to the government is likely to be around Rs. 40,000 crores, at a price of Rs. 1300 per share in an all-cash deal. It is to be noted that a bill is likely to be approved in the forthcoming budget to amend the SBI Act to reduce the minimum holding of the government or RBI from 55% to 51%. The move is aimed at giving the bank leeway to divest more equity to public to raise capital to fund growth. The follow-on public offer of SBI is likely to come after the majority share transfer to the government.

Read the article in Business Standard.

Garment manufacturer Mudra Lifestyle to come out with an IPO; price band at Rs. 75 – Rs. 90

Mudra Lifestyle Limited, a fabrics and garments manufacturer has fixed a price band of Rs. 75 – Rs. 90 for its initial public offer (IPO) of 9.58 mn equity shares. The funds raised will be utilized to finance the company’s expansion plans. The IPO opens on Feb. 8 and closes on Feb. 14. The sole book running lead manager for the issue is SBI Capital Markets Limited. The shares are proposed to be listed on BSE and NSE.

The company will be investing over Rs. 177 crores to expand its manufacturing facilities by setting up a new integrated unit having all process of yarn dyeing, weaving and processing at Tarapur and garment manufacturing near Bangalore. Out of the total investments, the company proposes to utilize debt up to Rs. 100 crores. Mudra Lifestyle proposes to raise the balance amount through IPO.

The issue through 100% book-building process constitutes 26.62% of the post issue paid-up capital of the company. It has earlier made a pre-IPO placement of 1.92 mn equity shares to SIDBI Venture Capital Limited and State Bank of India. The net offer to public will constitute 25.29% of the post issue paid-up capital of the company.

For the fiscal year 2005-06, the company’s total income was Rs. 107 crores, while PAT was Rs. 9 crores.

Read the article in The Economic Times.