New Delhi: India Inc's merger and acquisitions (M&As) have touched nearly US$ 50 billion level from January-July 2010, over three times the total in 2009. M&A deals in 2009 were worth about US$ 16 billion.
The deal valuations are also witnessing a revival in line with the recovery in stock markets and overall economy, besides the value of M&A deals has risen. According to data compiled by research firm VCCEdge, the M&A deal value increased by almost five-times to US$ 5.4 billion in July 2010, up from US$ 1.1 billion in July 2009.
The cumulative M&A deal value so far in 2010 from January to July’10 has touched US$ 49.7 billion, as compared to US$ 16.3 billion in the whole of 2009, VCCEdge said in its monthly deal report. The number of M&A deals so far this year stood at 411. Indian companies announced 64 M&A deals in June 2010 with a total value of nearly US$ 14.1 billion. March has been the biggest month in terms of M&A deals so far this year, which saw 72 deals worth a total of US$ 14.35 billion.
VCCEdge further pointed that the number of domestic deals stood at 21 in July 2010 and the value of domestic deals went up to US$ 2.03 billion in the month, from US$ 282 million in July 2009. The value of inbound deals rose sharply year-over-year to US$ 2.01 billion in July 2010 from US$ 744 million. The average deal size rose to US$ 216 million last month, from US$ 61 million in July 2009.
According to the report by VCCEdge, energy, healthcare and materials each has witnessed deals worth over US$ 1 billion . The biggest deal in the month of July was Reliance Natural Resources Ltd's merger with another Anil Ambani Group firm Reliance Power in an all-stock deal valued at US$ 1.56 billion. The top five deals accounted for 88 per cent of total M&A deal activity in July 2010, VCCEdge added. The deals included Fortis Healthcare's 25.37 per cent stake in Parkway Holdings for US$ 1.12 billion; Japanese major JFE Steel's US$ 1.03 billion purchase of 14.99 per cent stake in JSW Steel; ABB's US$ 965 million buyout offer for ABB India and Piramal Diagnostic Services' US$ 128 million sale to Super Religare Lab (SRL).
Success in my Habit
Monday, August 16, 2010
SEBI amends MF regulations
Mumbai: To bring greater transparency in the fee structure and improve turn-around time for customer service processes, market regulator SEBI has amended four mutual fund regulations and omitted one schedule.
These regulations pertain to offer period, allotment of units, refund of excess subscription, account statements and management fees chargeable by the asset management companies. Changes made in management fees have been described in the table given below.
The offer period for ELSS (earnings linked savings scheme) have been brought down by 30 days. These will now be open for more than 15 days instead of 45. Fund houses are now expected to refund excess subscription money within five working days instead six weeks. A failure to do so would start attracting penal interest at 15 per cent per annum on the expiry of five working days.
These regulations pertain to offer period, allotment of units, refund of excess subscription, account statements and management fees chargeable by the asset management companies. Changes made in management fees have been described in the table given below.
The offer period for ELSS (earnings linked savings scheme) have been brought down by 30 days. These will now be open for more than 15 days instead of 45. Fund houses are now expected to refund excess subscription money within five working days instead six weeks. A failure to do so would start attracting penal interest at 15 per cent per annum on the expiry of five working days.
DoT amends telecom licence rules
New Delhi: In view of national security concerns, the Directorate of Telecommunications (DoT) has made it mandatory for equipment suppliers to share design, development and supply chain details, besides allowing inspection of their manufacturing facility by the Indian government or concerned certification agencies.
According to the amendments to the telecom licence agreement — the unified access service license (UASL) — the equipment providers have to give access to their hardware and software for examination at the time of procurement of equipment. The process would be repeated every year and an inspection would be carried out every two years.
The software code would be kept in the escrow account in an encrypted form and would be used in case of security emergency.
A penalty of 100 per cent of the contract value would be levied by telecom equipment supplier in case malware/spyware is found in the equipment. Operators would also have to pay a fine of Rs 50 crore for every purchase of equipment in case there is a security breach.
The licensee will also work towards a phased plan to take over the maintenance of the equipment locally — entirely by Indian engineers and dependence on foreign engineers will be minimum or almost nil within a period of two years.
DoT in consultation with the Ministry of Home Affairs had been working on the amendment to the licence to address security concerns. It had accepted feedback from the industry and all stakeholders.
DoT had in December, last year made it mandatory for telecom service providers to seek security clearance before placing an order for telecom equipment. Despite this, many orders for Chinese equipment manufacturers Huawei and ZTE have been pending with the department since the last six months.
According to the amendments, telecom service providers will also have to form an organisational policy on security and management of their network. The policy will have to be submitted to the government within 30 working days from the date of the amendment to the UASL licence conditions.
According to the amendments to the telecom licence agreement — the unified access service license (UASL) — the equipment providers have to give access to their hardware and software for examination at the time of procurement of equipment. The process would be repeated every year and an inspection would be carried out every two years.
The software code would be kept in the escrow account in an encrypted form and would be used in case of security emergency.
A penalty of 100 per cent of the contract value would be levied by telecom equipment supplier in case malware/spyware is found in the equipment. Operators would also have to pay a fine of Rs 50 crore for every purchase of equipment in case there is a security breach.
The licensee will also work towards a phased plan to take over the maintenance of the equipment locally — entirely by Indian engineers and dependence on foreign engineers will be minimum or almost nil within a period of two years.
DoT in consultation with the Ministry of Home Affairs had been working on the amendment to the licence to address security concerns. It had accepted feedback from the industry and all stakeholders.
DoT had in December, last year made it mandatory for telecom service providers to seek security clearance before placing an order for telecom equipment. Despite this, many orders for Chinese equipment manufacturers Huawei and ZTE have been pending with the department since the last six months.
According to the amendments, telecom service providers will also have to form an organisational policy on security and management of their network. The policy will have to be submitted to the government within 30 working days from the date of the amendment to the UASL licence conditions.
Sebi tightens disclosure norms
Mumbai: Asks companies to submit shareholding details one day prior to the day of listing.
In a move that will help investors take better-informed investment decisions in the newly-listed entities, the market regulator has directed companies to submit shareholding details to stock exchanges one day prior to the day of listing.
The regulator has also amended the way depository receipts are disclosed as part of the shareholding pattern. The decisions were taken at the board meet of the Securities and Exchange Board of India (Sebi).
“The board decided to mandate that the companies shall file shareholding pattern according to the Clause 35 one day prior to the date of listing, which shall be uploaded on the website of exchanges before commencement of trading,” said a release issued by Sebi. Currently, unlisted companies disclose their shareholding pattern as part of their prospectus and submit it to the exchanges on a quarterly basis.
In another decision, which will bring in more transparency in terms of actual holding of depository receipts (DRs), Sebi has directed companies to classify such holdings as ‘promoter/promoter group’ and ‘non-promoter’. “In the quarterly shareholding pattern, the disclosure of shares held by custodians, against which depository receipts have been issued, shall be classified as promoter/promoter group and non-promoter,” said the release.
Further, if there is a change of more than two per cent in the paid-up share capital due to any corporate event, the same has to be disclosed to the stock exchanges within 10 days.
“The board also decided that in order to ensure updated public dissemination of shareholding pattern, whenever the change (+/-) exceeds two per cent of the paid up share capital of the company after a corporate event, companies shall file revised shareholding pattern with the stock exchanges within 10 days from the date of such change in the capital structure,” added the release.
In a move that will help investors take better-informed investment decisions in the newly-listed entities, the market regulator has directed companies to submit shareholding details to stock exchanges one day prior to the day of listing.
The regulator has also amended the way depository receipts are disclosed as part of the shareholding pattern. The decisions were taken at the board meet of the Securities and Exchange Board of India (Sebi).
“The board decided to mandate that the companies shall file shareholding pattern according to the Clause 35 one day prior to the date of listing, which shall be uploaded on the website of exchanges before commencement of trading,” said a release issued by Sebi. Currently, unlisted companies disclose their shareholding pattern as part of their prospectus and submit it to the exchanges on a quarterly basis.
In another decision, which will bring in more transparency in terms of actual holding of depository receipts (DRs), Sebi has directed companies to classify such holdings as ‘promoter/promoter group’ and ‘non-promoter’. “In the quarterly shareholding pattern, the disclosure of shares held by custodians, against which depository receipts have been issued, shall be classified as promoter/promoter group and non-promoter,” said the release.
Further, if there is a change of more than two per cent in the paid-up share capital due to any corporate event, the same has to be disclosed to the stock exchanges within 10 days.
“The board also decided that in order to ensure updated public dissemination of shareholding pattern, whenever the change (+/-) exceeds two per cent of the paid up share capital of the company after a corporate event, companies shall file revised shareholding pattern with the stock exchanges within 10 days from the date of such change in the capital structure,” added the release.
Tuesday, August 3, 2010
India will need 1,150 planes worth $130 bn: Boeing
NEW DELHI: Major aircraft manufacturer Boeing revised upwards its market outlook for India saying the country would require 1,150 planes worth $130 bn over the next two decades.
The company, which had earlier estimated that 1,000 planes worth about $100 bn would be required in the country in the same period, revised its outlook on the basis of the estimated growth rates of GDP and passenger traffic.
"Most of these aircraft will be twin-aisle or the Boeing 787-8 type which will be able to fly point-to-point to destinations in Europe and the US to Indian cities," Boeing India President Dinesh Keskar told reporters here.
In 2000, there were only two Indian carriers -- Air India and British Airways -- serving the India-London route with 24 weekly frequencies. This year, there are six airlines serving the sector with 104 frequencies.
Noting that the average seats per flight on these routes had declined from 412 in 2000 to 297 in 2010, he said this showed that the large aircraft like B-747s have been replaced by twin-aisle widebody aircraft like B-777s or Airbus A-330s.
Keskar said that there would no delay in the delivery of the first Boeing 787-8 or Dreamliner to Air India.
"The first Dreamliner will be delivered to Air India in the late first quarter or early second quarter of 2011. The delivery to Air India remains on track. This aircraft is now in the final assembly line," he said, adding that the 787 flight test programme was "progressing well".
Responding to questions, Keskar said India would become one of the "significant leasing markets" with a large chunk of planes being taken by Indian carriers on lease.
Roughly two-thirds of the Indian aviation market was now served by no-frill carriers like IndiGo, SpiceJet, JetLite, JetKonnect and Kingfisher Red. "This trend will continue over the next two decades".
The Boeing India chief said air travel in India, which was tied closely to the country's economic growth, would "largely recover by 2011".
Despite going through the most severe recession in the history of the aviation industry, the Indian airlines have been "one of the fastest to recover".
"We believe there will be a record 50 mn passengers this year if the trend continues", Keskar said, adding that Indian airlines carried a record 44 mn passengers in 2009.
The company, which had earlier estimated that 1,000 planes worth about $100 bn would be required in the country in the same period, revised its outlook on the basis of the estimated growth rates of GDP and passenger traffic.
"Most of these aircraft will be twin-aisle or the Boeing 787-8 type which will be able to fly point-to-point to destinations in Europe and the US to Indian cities," Boeing India President Dinesh Keskar told reporters here.
In 2000, there were only two Indian carriers -- Air India and British Airways -- serving the India-London route with 24 weekly frequencies. This year, there are six airlines serving the sector with 104 frequencies.
Noting that the average seats per flight on these routes had declined from 412 in 2000 to 297 in 2010, he said this showed that the large aircraft like B-747s have been replaced by twin-aisle widebody aircraft like B-777s or Airbus A-330s.
Keskar said that there would no delay in the delivery of the first Boeing 787-8 or Dreamliner to Air India.
"The first Dreamliner will be delivered to Air India in the late first quarter or early second quarter of 2011. The delivery to Air India remains on track. This aircraft is now in the final assembly line," he said, adding that the 787 flight test programme was "progressing well".
Responding to questions, Keskar said India would become one of the "significant leasing markets" with a large chunk of planes being taken by Indian carriers on lease.
Roughly two-thirds of the Indian aviation market was now served by no-frill carriers like IndiGo, SpiceJet, JetLite, JetKonnect and Kingfisher Red. "This trend will continue over the next two decades".
The Boeing India chief said air travel in India, which was tied closely to the country's economic growth, would "largely recover by 2011".
Despite going through the most severe recession in the history of the aviation industry, the Indian airlines have been "one of the fastest to recover".
"We believe there will be a record 50 mn passengers this year if the trend continues", Keskar said, adding that Indian airlines carried a record 44 mn passengers in 2009.
Godrej to invest Rs 300-cr in chemical, animal feed businesses
On back of a healthy growth in the first quarter of the current fiscal, Godrej Industries Limited (GIL) is planning a major expansion in its agri and chemical businesses at an investment of around Rs 300-crore, a top company official said.
Godrej Industries has earmaked Rs 230-crore for setting up a new chemical manufacturing unit at Ambernath, near Mumbai. Another Rs 75-crore will be invested in its animal-feeds arm for expansion, he said.
"The last quarter has been very positive for Godrej Industries--the chemical and agri-feeds subsidiaries have posted strong growths. We are looking at setting up 4-5 animal feed units at an investment of Rs 10-15-crore each in Maharashtra, UP and south India," GIL's Managing Director, Nadir Godrej, told media today.
However, he did not divulge any further details. Godrej currently has 6-7 company-owned units besides operating 20-30 third party units. The total production capacity is around 1-million MTPA.
The upcoming units will add another 1,00,000 MTPA to the existing ones, Godrej said.
"Animal feed contributes around 50 per cent of the total revenues of Godrej Agrovet (Rs 1,500-crore) and we expect a 15-20 per cent growth here this fiscal," Godrej added.
Godrej Industries has earmaked Rs 230-crore for setting up a new chemical manufacturing unit at Ambernath, near Mumbai. Another Rs 75-crore will be invested in its animal-feeds arm for expansion, he said.
"The last quarter has been very positive for Godrej Industries--the chemical and agri-feeds subsidiaries have posted strong growths. We are looking at setting up 4-5 animal feed units at an investment of Rs 10-15-crore each in Maharashtra, UP and south India," GIL's Managing Director, Nadir Godrej, told media today.
However, he did not divulge any further details. Godrej currently has 6-7 company-owned units besides operating 20-30 third party units. The total production capacity is around 1-million MTPA.
The upcoming units will add another 1,00,000 MTPA to the existing ones, Godrej said.
"Animal feed contributes around 50 per cent of the total revenues of Godrej Agrovet (Rs 1,500-crore) and we expect a 15-20 per cent growth here this fiscal," Godrej added.
Blue Star expects Rs 22-bn orders in FY11
MUMBAI: Refrigeration and cooling systems manufacturer Blue Star Ltd hopes to book orders worth Rs 22 billion this fiscal, a top official said.
The orders will be under its electromechanical projects business, Vir Advani, executive director, told Reuters in an interview on Tuesday.
"About 600 crores (6 billion) rupees of order inflow this year will be from relatively new markets under the electromechanical projects business." "The core business under electromechanical projects, which is commercial buildings, will continue to be by far the largest. That somewhere in terms of inflow will be around 1,600 crores (16 billion) rupees," he added.
The company operates under three business segments - electromechanical, which includes projects and equipments; cooling products; and professional electronics and industrial systems. The firm orderbook at June-end stood at 19 billion rupees.
The orders will be under its electromechanical projects business, Vir Advani, executive director, told Reuters in an interview on Tuesday.
"About 600 crores (6 billion) rupees of order inflow this year will be from relatively new markets under the electromechanical projects business." "The core business under electromechanical projects, which is commercial buildings, will continue to be by far the largest. That somewhere in terms of inflow will be around 1,600 crores (16 billion) rupees," he added.
The company operates under three business segments - electromechanical, which includes projects and equipments; cooling products; and professional electronics and industrial systems. The firm orderbook at June-end stood at 19 billion rupees.
Tata Capital, Japan's Mizuho to set up PE fund
MUMBAI: Tata Capital, a unit of diversified Indian conglomerate Tata Group, said on Tuesday it will set up a private equity fund in Singapore
jointly with Japan's Mizuho Securities.
Further details were not immediately available. In July, Tata Capital had said it plans to raise $1 billion for private equity funds by December 2011.
Tata Capital's offerings include consumer and corporate finance, equity research, investment banking and private equity, according to the company's website.
jointly with Japan's Mizuho Securities.
Further details were not immediately available. In July, Tata Capital had said it plans to raise $1 billion for private equity funds by December 2011.
Tata Capital's offerings include consumer and corporate finance, equity research, investment banking and private equity, according to the company's website.
Employees at Indian Volvo bus plant strike over pay
STOCKHOLM: About 600 employees of a Volvo bus plant in India are striking for better pay and the return to work of four colleagues suspended following a dispute at the plant, a spokesman for the Swedish group said on Tuesday.
The strike has lasted for a week, Per-Martin Johansson told media, but a labour conflict which has slowed down production has been going on for about three months, he added.
"The union has asked for higher wages and the return to work of the four employees who were suspended," Johansson said.
Four of the plant's employees were suspended following a dispute at the plant in April, during which they allegedly physically assaulted a manager.
During the three month labour conflict some employees have worked less or not at all in protest.
The conflict has set the plant's production pace back 60 buses, Johansson said. The factory rolled out 535 buses last year.
Johansson would not comment on the cost of the labour conflict to the Swedish company, but Indian financial newspaper Business Standard said it had cost "close to 50 crore rupees" or about eight million euros or 10 million dollars to Volvo.
Volvo Group -- which makes trucks, buses and boat and aircraft equipment -- does not include the Volvo Cars brand.
Volvo Cars was sold in 1999 to US auto giant Ford, which in turn completed the brand's sale to China's Geely on Monday.
The strike has lasted for a week, Per-Martin Johansson told media, but a labour conflict which has slowed down production has been going on for about three months, he added.
"The union has asked for higher wages and the return to work of the four employees who were suspended," Johansson said.
Four of the plant's employees were suspended following a dispute at the plant in April, during which they allegedly physically assaulted a manager.
During the three month labour conflict some employees have worked less or not at all in protest.
The conflict has set the plant's production pace back 60 buses, Johansson said. The factory rolled out 535 buses last year.
Johansson would not comment on the cost of the labour conflict to the Swedish company, but Indian financial newspaper Business Standard said it had cost "close to 50 crore rupees" or about eight million euros or 10 million dollars to Volvo.
Volvo Group -- which makes trucks, buses and boat and aircraft equipment -- does not include the Volvo Cars brand.
Volvo Cars was sold in 1999 to US auto giant Ford, which in turn completed the brand's sale to China's Geely on Monday.
BP sells Colombian business for $1.9 billion
LONDON: British oil giant BP said on Tuesday it will sell its Colombian business for a total of $1.9 billion (1.4 billion euros) to national oil company Ecopetrol and Talisman of Canada.
The divestment is part of BP's plans to sell off up to $30 billion of assets, as it faces soaring costs from the Gulf of Mexico oil spill disaster.
The news comes just one week after BP's vilified chief executive Tony Hayward resigned in the wake of a record second-quarter loss of $16.9 billion dollars - the biggest quarterly loss in British corporate history.
"BP today announced that it has agreed to sell its oil and gas exploration, production and transportation business in Colombia to a consortium of Ecopetrol, Colombia's national oil company (51 percent), and Talisman of Canada (49 percent)," it said in a statement.
"The two companies will pay BP a total of $1.9 billion in cash ... for 100 per cent of the shares in BP Exploration Company (Colombia) Limited, the wholly-owned BP subsidiary company that holds BP's oil and gas exploration, production and transportation interests in Colombia."
The transaction, which is subject to regulatory and other approvals, is expected to complete by the end of 2010.
The divestment is part of BP's plans to sell off up to $30 billion of assets, as it faces soaring costs from the Gulf of Mexico oil spill disaster.
The news comes just one week after BP's vilified chief executive Tony Hayward resigned in the wake of a record second-quarter loss of $16.9 billion dollars - the biggest quarterly loss in British corporate history.
"BP today announced that it has agreed to sell its oil and gas exploration, production and transportation business in Colombia to a consortium of Ecopetrol, Colombia's national oil company (51 percent), and Talisman of Canada (49 percent)," it said in a statement.
"The two companies will pay BP a total of $1.9 billion in cash ... for 100 per cent of the shares in BP Exploration Company (Colombia) Limited, the wholly-owned BP subsidiary company that holds BP's oil and gas exploration, production and transportation interests in Colombia."
The transaction, which is subject to regulatory and other approvals, is expected to complete by the end of 2010.
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