Several Ahmedabad-based stock brokers are playing a key role in arranging dummy investors. The 'investors' apply for their full quota of shares. After allotment, they transfer the shares to the accounts of the brokers fronting for the operators in exchange for a 2.5 per cent commission.
The Bombay Stock Exchange is set to see a reshuffle in its board of directors, the first since the country's oldest bourse was demutualised and became a limited company last year. The reshuffle, details of which are yet to be discussed, is widely believed to be at the behest of market regulator Securities and Exchange Board of India.
UTI Asset Management Company, the country's fourth-largest mutual fund, is reviewing its proposed initial public offering in view of the turbulence in the global financial markets and the meltdown in Indian equities. The management is having a rethink on the IPO because of the bearish sentiment prevailing in the markets and a lack of investor appetite, according to a source familiar with the development.
VMIL officials declined to comment on the development. According to sources close to the development, VMIL will sell stake to raise money for expanding Hungama, the content and mobile services arm. The Mumbai-based company has already held two to three rounds of meetings with these private equity investors. The company's valuation has been pegged at Rs 800 crore (Rs 8 billion). The funds raised would be used for Hungama's expansion.
Kolkata-based personal care products maker Emami, which made a hostile takeover bid for Zandu Pharmaceuticals, on Friday forced the latter to withdraw a plan to offer preferential shares to its promoters.Zandu had sent notice to the Bombay Stock Exchange late on Thursday evening saying its board would meet to discuss a preferential share issue to the promoters and directors.Emami lawyers swung into action and sent legal notice early on Friday to Zandu's board.
Market participants hammered the Emami stock on anticipation that the company would have to fight an intense battle with the Parikhs, one of the promoter groups in Zandu, who are planning to stay put.
Private equity major DE Shaw is investing Rs 630 crore (Rs 6.3 billion) in Noida-based International Amusement Ltd (IAL), the promoters of Appu Ghar. This is the country's first private equity (PE) deal in an amusement park.
US-based buyout fund Carlyle, Providence Equity Partners, Warburg Pincus and Blackstone are understood to be exploring a buyout of Temasek's holding in Mumbai-based pure-play business process outsourcing firm Firstsource. The news triggered the company's share price to rise 6.76 per cent on the Bombay Stock Exchange (BSE) to close at Rs 43.45 on Tuesday. Warburg Pincus has a stake in WNS, a BPO company, while Blackstone has a majority stake in Intelenet.
Sylph Technologies stock rises 100,000% to Rs 800 on re-listing.
When markets are topsy-turvy, everyone -- including the companies' management, merchant bankers, retail and institutional investors -- chickens out.
"We are looking into the issue because we have received many requests. We will permit NRI fund managers who have at least a year's experience in managing FII funds as long as they do not put their proprietary funds into it," confirmed a senior Sebi official.
Earlier norms on para-banking activities stated that investment by a bank in a subsidiary company, financial services company, financial institutions and stock and other exchanges could not exceed 10 per cent of its paid-up share capital and reserves. On a cumulative basis, the limit was fixed at 20 per cent of the bank's paid-up capital and reserves.
At least four top brokerages -- Religare Enterprise, Edelweiss Capital, Emkay Shares and Stocks and Modern Securities -- have delayed their fourth quarter results.
Prithvi Haldia, managing director of Prime Database, a company tracking corporate and primary market developments, is however of the view that primary markets usually follow the secondary market. IPOs have suffered mainly as the timing was not right.
Ajay Bagga, CEO, Lotus India Mutual Fund, feels the government should have taken timely action to control inflation. He feels that the recent fall is not a bull-market correction but a serious downturn that could last for about six to eight months. He said the government cannot afford to keep interest rates this high. It is likely to cut rates once the inflation moderates. Meanwhile the rupee will be allowed to appreciate to compensate for the rise in global commodity prices.
Primary markets may see banks using electronic clearance systems (ECS) to clear cheques in order to reduce the gap between the time an issue closes and its listing on the bourses.The primary market advisory committee of the Securities and Exchange Board of India (Sebi) met on Friday to iron out some of the logistical difficulties involved in making the IPO process faster.
JPMorgan Chase is planning to invest $100-150 mn a year in India. This fund will be looking at a range of sectors and would not be focused on one particular sector. It can bring in sector expertise, investment banking expertise and the other broader resources of a full-service financial institution. The new fund, Private Capital Asia, will take non-controlling stakes in mid-cap companies, exclusively in Asia. JPMorgan regards India as a supportive market for private equity.
Richard Heald, Vice-Chairman and Amitabh Malhotra, Director of Rothschild spoke about the volatile market, its implications and how this is an opportunity for Rothschild in India. Heald said that rising commodity prices are worrisome. The inflationary pressures are a concern. He advised that corporates should be open to all financing options. Investors in general want to invest in cash generating assets and commodities. With no decoupling other markets will impact India too.
Sources said non-banking financial companies of brokerage outfits had extended loans to clients by availing of bank credit. They could face serious trouble if auditors 'qualify' their books for extending loans on small- and mid-cap stocks as 'highly risky'. With just over a week to go before the end of the current financial year, most of the NBFCs are cleaning up their books before the audit to avoid being caught on the wrong foot.
Dubai-headquartered Baer Capital Partners is planning to launch 2 India-centric hedge funds this year. The two funds - Beacon India Opportunities Fund with a corpus of $400 million and the $100 million Beacon India Growth Fund - will invest in listed companies. It is also planning an exclusive $100 million FMCG fund. These funds will invest across sectors including IT, pharma, FMCG, banks and auto. It has got approval from Sebi. These funds will not involve momentum trading.
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