Intraday Calls - IPO Analysis - Team Intraday

Tuesday, May 12, 2009

Kabirdass Motor to invest Rs 100 cr, files for IPO

Mumbai: Kabirdass Motor Co has approached the Securities and Exchange Board of India (SEBI) with a draft prospectus for an initial public offer to partly finance its plans to invest more than Rs 100 crore in its business.

The company is planning for different options to raise Rs 81.28 crore from the sale of its shares, including Rs 61.28 crore from the IPO. Apart from that, it has tied up for a bank term loan worth Rs 20 crore, as per its draft IPO prospectus filed with the SEBI.

The total investment plan of Rs 101.28 crore includes those for land, building, plant and machinery, research and development, brand promotion and other expenses.

Chennai-based Kabirdass Motor Company Limited was incorporated in November 2006 as a private limited company. It is engaged in the manufacturing and distribution of electric bikes and scooters under the brand name 'Xite'.

Source: Asian CERC

Godrej Properties plans IPO

Godrej Properties, the realty arm of Godrej, plans to come out with an IPO (initial public offering) this fiscal. This IPO is coming at a time when the realty index has given up 71% in the last year. The recent salary hike of government employees, as well as fall in property prices and cut in lending rates may give a support to the falling property prices.

Recently, Godrej Industries has announced buy back of shares of 5.70 lakh equity shares at a price not exceeding Rs275, which translates into a 9.9 per cent stake.

Source: Asian CERC

Middle East IPOs raise $83.6 m in Q1 of 2009

Dubai: Middle-East companies raised $83.6 million through two IPOs in the first quarter of this year. However, this is 97.9 per cent lower as against fund raised in 2008, an Ernst & Young report has said.

$3.98 billion was raised through 13 IPOs in the first quarter of 2008, Ernst & Young's first quarter Global IPO update 2009 has said.

Saudi Arabia's Etihad Atheeb Telecommunications was the largest IPO in the Middle East during this period, which raised $80 million and listed on the Riyadh Stock Exchange. The company was ranked third in terms of capital raised among a total of 50 IPOs worldwide, all of which raised just $1.4 billion, it said.

A Syrian company, Al Adham Foreign Exchange Co, was the only other regional IPO in Q1 2009. It raised $3.62 million and listed on the Damascus Stock Exchange.

Source: Asian CERC 

Rights issues were priority of FY09

Most of the Indian companies were using existing investor's route for raising capital last year mainly due to economic turmoil. Awful market condition led loss of investor appetite in new share issues and also froze out overseas funding avenues.

Rights issues, the route through which companies raise funds by issuing fresh shares to existing investors emerged as the single-biggest fundraising route during the year as compared to initial public offers (IPOs) and overseas issues that dominated fundraising in the previous year.

According to Prime Database, companies raised Rs 12,622 crore through 23 rights issues in 2008-09 compared with Rs 2,023 crore through IPOs during the period. The amount raised through rights issues last year, however, more than halved compared to Rs 32,518 crore by 30 companies last year. However, the extent of decline was much less than IPOs, which tumbled 95 per cent during the same period.

Rights issues are the current flavour. Companies are looking to tap existing shareholders as valuations are too attractive to dilute to outsiders, says Ravi Sardana, senior vice-president of ICICI Securities.

Source: Asian CERC 

SEBI wants legal opinion on NSDL order

The Securities and Exchange Board of India (Sebi) on Monday said it will look for an external legal opinion on whether the board of Sebi has the right to scrutinize the orders of special committee passed after the quasi-judicial proceedings against NSDL. The board has decided to keep back the committee's orders till opinion. The committee was set up after CB Bhave, former NSDL chairman, took over at Sebi.

The case deals with Sebi's investigations into 21 IPOs between 2003 and 2005. Sebi's investigate revealed that the shares, which was reserved for retail investors were illegally acquired by various entities through thousands of untrue applications. The regulator want advice of legal counsel on whether the committee has acted within the framework and terms of reference established by the board resolution.

Source: Asian CERC