QBiz: India Most Attractive Investment Destination, IPOs Galore
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1. Vodafone CEO Sees ‘New India’, IPO on Anvil: TOI
Vodafone Group CEO Vittorio Colao on Wednesday said he is seeing the emergence of a “new India”, with several changes at the macro level.
He also announced that the Indian arm of the world’s second largest mobile operator — which has been involved in a series of tax disputes in the country — has begun preparatory work for an initial public offer that has been in the pipeline for several years. Colao said the timing of the IPO would depend on several factors, including market conditions.
“Do you see a new India? Yes, we see a new India. I also hear people say it’s not fast enough. I say fine but it’s also a big country. I face the same problem in other countries.... we are seeing a new India. Is it visible in every aspect of our business? No, it’s not. But it’s starting to be visible. If the pace continues, digitisation of the country will happen,” Colao told reporters.
2. India Most Attractive Investment Destination: EY
In an endorsement of India’s fundamentals, almost one-third of the respondents in a survey by EY ranked the country as the most attractive market this year, while 60 per cent placed it among the top three investment destinations. China was considered India’s main competitor.
The Ready, Set, Grow: EY’s 2015 India Attractiveness Survey is based on the responses of 505 global decision makers collected during March and April. Business leaders said they found India’s macroeconomic and political stability, FDI policy and ease of doing business more attractive in 2015 than last year, according to the survey, indicating that the government’s drive to improve business was yielding results.
Labour costs, the domestic market and macroeconomic stability were cited as the most important factors in making India attractive. Tax and regulatory reforms, regulatory compliance cost and transport infrastructure scored low. The government said it was working on those issues.
3. ThyssenKrupp to Set Up First Elevator Unit In India: TOI
ThyssenKrupp is setting up its first elevator manufacturing facility in Pune. The Rs 300-crore project is set to start production by mid-2017 with an initial annual output of 6,000 units, the company announced on Wednesday.
“Moving in elevators has become a necessity, not a luxury,” Peter Alaart, head of ThyssenKrupp’s elevator unit, said. The company aims to profit from the growing demand in urban high-rise housing and a rapidly expanding Indian elevator market that is likely to surpass $1.6 billion by 2020, according to a recent TechSci Research report.
The Chakan factory will contain a production site as well as a training academy. “With this facility we also plan to cater to neighbouring markets like Bangladesh or the Middle East,” Bharat Vishnani, MD, ThyssenKrupp Elevator India, said.
4. IndiGo’s Rs 2,500-cr IPO Likely To Open On October 26: ET
No-frills carrier IndiGo’s parent InterGlobe Aviation is likely to open the Rs 2,500-crore initial public offer on October 26.
Under the offer, the company plans to issue fresh shares worth Rs 1,272 crore. An equivalent amount can be raised through the sale of up to 3.01 crore shares by its existing shareholders. The initial share sale is likely to start on October 26 and end on October 28, sources said.
Last month, InterGlobe Aviation received approval from the Securities and Exchange Board of India (Sebi) for the IPO. IndiGo is one of the two profit-making domestic airlines. The only other profitable airline is GoAir.
5. Virtusa Corp In Final Negotiations To Buy Polaris Consulting for Rs 1,904 cr: ET
Arun Jain, the founder chairman and mentor of Polaris Consulting & Services, is set to exit his two-decade-old company as discussions with Nasdaq-listed Virtusa Corp. to sell a controlling stake have reached the final stages.
Virtusa, co-founded by Sri Lankan entrepreneurs Kris and Tushara Canekeratne, is believed to have valued Polaris at close to $350 million, a near 20 per cent premium to its current market capitalisation of $295 million (Rs 1,904 crore), according to two people. The Polaris stock has in any case appreciated close to 30 per cent in the last six months, ever since a formal sale process managed by Credit Suisse gathered momentum. The company was earlier called Polaris Software Labs.
6. New Fund Offerings Face Sept Drought: BS
New fund offers (NFOs), a popular money mobilising tool for mutual fund houses, came to a virtual halt in September.
A cap on commission paid to distributors and a rise in market volatility saw the Rs 13-lakh-crore fund management sector launch just one NFO last month, which mopped up a mere Rs 20 crore.
In comparison, 47 new equity schemes were launched by the mutual fund sector that helped garner Rs 7,709 crore. Last year, a record 75 NFOs were launched.
NFOs have been on a downward spiral since April when the curbs on commissions kicked in. The Securities and Exchange Board of India (Sebi) has also been discouraging fund houses from launching new schemes unless they are different from existing ones. The first six months of this financial year saw an average of three NFOs a month.
7. One-Time Fund Infusion For Stalled Road Projects: BS
The NDA government will give a one-time financial assistance to revive ‘physically incomplete and languishing’ national highway (NH) projects left unfinished by the previous Congress dispensation. The three stalled NH projects, where 50 per cent of the construction has been completed till November 30, 2014, will qualify for this.
The Cabinet Committee on Economic Affairs’ decision to infuse Rs 878 crore is likely to benefit all three build-operate-transfer, or BOT, (annuity) mode projects. Of the three, the government has already received two applications to infuse Rs 703 crore in stretches running from Chhapra to Hajipur in Bihar, and Krishnangar to Behrampur in West Bengal.
8. Top 500 Cos Over-Leveraged, Recovery Still Away, Says India Rating: FE
Although credit metrics of the largest listed corporates have shown signs of improvement, a full recovery is still some time away, says a report. “The credit metrics of the largest listed 500 corporate borrowers are showing signs of bottoming out, but any claims of a recovery in the system-wide credit profile may be early,” India Ratings said in a study.
The rating agency took the top 500 listed corporates, excluding banking and financial services, with the highest balance sheet debt as of 2013-14, for its study. These corporates account for total balance sheet debt of Rs 31.99 trillion in 2014-15. Around 69 per cent of the debt was from five sectors – power, metals & mining, oil & gas, infrastructure & construction and telecom.
The agency said in 2014-15, these top corporates’ leverage (median) was estimated at 4.33 times compared to 4.65 times in 2013-14.
9. Hindustan Unilever’s Q2 Net Dips 2.6% to Rs 962 cr on Price Cuts: TOI
Price cuts and the phasing out of excise duty benefits impacted Hindustan Unilever’s (HUL’s) September quarter (Q2) performance with net profit declining 2.6 per cent to Rs 962 crore from Rs 988 crore in the corresponding quarter of the previous year.
The maker of Surf Excel detergents and Lifebuoy soaps continued to pass on the benefits of lower commodity costs to consumers during Q2. However, the domestic consumer business grew 5 per cent with net sales at Rs 7,820 crore, and underlying volume growth maintained at 7 per cent, ahead of market expectations.
According to Harish Manwani, chairman, HUL, the deflationary commodity cost environment is likely to continue in the near term. “Our strategy of delivering consistent and competitive growth with sustainable improvement in operating margin remains unchanged,” he said.
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