IndusInd Bank to issue GDRs worth Rs. 140 crores by March-end

The Hinduja Group-controlled IndusInd Bank is planning to raise around Rs. 140 crores through global depository receipts (GDR) by March 2007. The bank will issue close to 30 mn shares which will listed at the Luxembourg Stock Exchange. CLSA has been appointed as the lead manager to the issue. The fresh infusion of capital will bring the promoter holding down to about 28% from 31.3%. The foreign holding in the bank will increase to 25 % from about 17%. The GDR issue will help enable the bank to boost its capital adequacy ratio to 11.25% from 11.10%. It is also planning to raise Rs. 50 crores through issuance of lower Tier-II bonds. The post-issue paid-up capital of the bank will rise to Rs. 320 crores from Rs. 290 crores.

The capital raising will enable IndusInd to pursue new business lines like wealth management and asset reconstruction. It is also planning to expand its presence overseas by setting up an offshore banking unit in Singapore. At present, the bank has representative offices in Dubai and London.

Read more on IndusInd Bank in the article in Business Standard.

UK’s Centric, Fox Mandal and the Hinduja Group to float LPO JV

UK-based contact centre Centric has entered in to an alliance with the Hinduja Group and leading Indian law firm Fox Mandal Little to set up one of India’s largest legal process outsourcing (LPO) firms. The three-way JV, to be called Centric LPO, is likely to employ over 1000 lawyers initially and aims to make India an outsourcing hub for international legal practices. It will be 40% owned by the UK-based outsourcing major and 60% by the JV between Hinduja TMT Technologies and Fox Mandal, with Hinduja TMT holding the majority stake. Hinduja TMT had recently completed the acquisition of US-based BPO Affina. The Hinduja TMT-Fox Mandal JV will have four members on the LPO board while Centric will have two. Centric will use its existing customer base in these markets to woo clients for the new business. Similarly, Fox Mandal will provide the legal expertise while the Hindujas the process skills. The JV will become operational in the next two months and that Centric had already lined up business from UK and US clients. The LPO will focus on every legal aspect-from the low-end secretarial works to law firm accounting and high-end legal work. In two years, it will ramp up to 2000 people.

The LPO segment is poised to cross $6 bn by 2010 and $15-$20 bn by 2015. LPO customers include legal departments of multinationals, international law, legal publishing and legal research enterprises. As of now, it accounts for less than 11% of the $6.3-billion ITeS-BPO pie. Other prominent players in the Indian LPO space include Pangea3, OfficeTiger and Integreon, which is also a BPO player, and law firms such as AZB & Partners.

Read the article in The Economic Times.

The Hinduja Group seeks management control in buying Pirelli’s stake in Telecom Italia

The Hinduja Group has made it clear that it will seek management control in Telecom Italia if it bids for Italian tyre and real estate major Pirelli’s stake in Italy’s largest telecommunications operator. Though Pirelli holds the largest block of shares in Telecom Italia, acquisition of that stake alone will not give the Hindujas majority control. However, given the widely-held structure of Telecom Italia’s shareholding, it may give them management control. Pirelli owns 80% of Telecom Italia’s holding company Olimpia, which has an 18% stake in Telecom Italia. Telecom Italia is Europe’s fifth largest telecommunications group with sales of nearly $30 bn and market capitalization of $77 bn. Back-of-the-envelope calculations put the acquisition cost for Pirelli’s stake in Olimpia at $12 bn. The race for Telecom Italia is hotting up with Sistema, the Russian billionaire industrialist Vladimir Yevtushenkov being the third to join the fray. US private equity firm Blackstone also expressed an interest in picking up a stake in Telecom Italia two months ago, and several others are expected to join the bidding bandwagon soon.

Read The Economic Times article.
Related Post: The Hinduja Group interested in majority stake in Telecom Italia

The Hinduja Group interested in majority stake in Telecom Italia

The Hinduja Group is looking to acquiring a stake in Telecom Italia, Italy’s largest telecom company and Europe’s fifth largest telecommunications group. The group is said to be examining buying tyre maker Pirelli’s 18% stake in the Italian company.

Telecom Italia boasts of around 31 mn mobile subscribers in Italy and another 24 mn in Brazil. As of September 2006, it posted sales of €23 bn and its EBITDA was €9.8 bn. As Telecom Italia’s market cap is about $77 bn, Pirelli’s 18% stake will be valued at around $12-13 bn.

Telecom Italia is owned 18% by a company called Olimpia, which, in turn, is controlled by Pirelli, the Italian tyre and real estate group. Sometime ago, Pirelli increased its Olimpia holding to 80% by buying stakes owned by two banks. This transaction raised the possibility of Pirelli consolidating Olimpia’s accounts with itself. Such a move would badly dent Pirelli’s credit rating as its net debt would jump 31 times. The debt of both Olimpia and Telecom Italia is at around $57.12 bn. To avoid this, Pirelli is believed to be scouting around for buyers for the telecom company.

The Hinduja Group is also in the race for India’s fourth largest telecom company, Hutchison Essar, in which British telecom major Vodafone, Reliance Communications and Essar are bidding. On Friday, the group announced that it would begin due diligence of Hutchison Essar on January 24 and that a final bid will be submitted after that.

Blackstone, the private equity group, had said in November 2006 that it might be interested in taking a stake in Telecom Italia.

Read more in The Economic Times and Business Standard.