With less than 35 days to go for the ICC Cricket World Cup 2011, brands and retailers are gearing up to boost their sales as well as promote their brands through the launch of a series of cricket-related merchandise and products.
The sports merchandise market in India is currently pegged at around Rs. 2,525 crore, of which 45 per cent is sports apparel market. The total market is expected to grow at an annual rate of 13 per cent to reach Rs. 12,000 crore by 2020.
So, apart from increasing their ad- spends companies are trying to engage with consumers by launching products with the World Cup theme.
Right from PepsiCo to watchmaker Timex and retail chains like Big Bazaar, all are trying to cash in on the cricket mania.
PepsiCo has launched six flavours called ‘ Lays Flavour World Cup 2011’ of its snack brand, Lays, based on the tastes popular with the six participating nations — Australia’s Herb• Lime, South Africa’s Peri Peri Sauce, Sri Lanka’s Sweet Onion Sauce, England’s Grilled Cheese, West Indies’ Hot & Sweet Chilli and India’s Magic Masala.
“ Cricket is the most important sports for Indians. By launching these World Cup special flavours, apart from boosting sales, we feel we will be able to engage our consumers in a better way,” Vidur Vyas, marketing director, PepsiCo Foods India, said.
Every day, one lucky winner would get a chance to walk with the captains in the ICC Cricket World Cup. Also, buyers stand a chance to win mobile phones every hour and home theatre systems every twelve hours.
Retail chain Big Bazaar, the official merchandiser for the World Cup, has launched specially designed cricket merchandise for men, ladies and children. The range includes sports tees, active dry tees, track pants, shorts, sweatshirts, caps, head bands and more . The range starts from Rs. 199 onwards. It has also launched a range of personal care products like apparel, toothpastes and soaps through its Sach brand — inspired by Sachin Tendulkar.
The firm expects the special marketing initiative to boost its sales by 10 per cent. The world’s third largest watchmaker, Timex, which is the official product licensee for the ICC World Cup 2011, has launched the exclusive ICC World Cup 2011 watch collection.
The new ICC Cricket World Cup 2011 collection is designed by Giorgio Galli. These watches fall within the price range of Rs. 1,400- 6,000. The companies feel that these special initiatives will help build their brands and help them connect with their consumers in a better way.
Showing posts with label Business News. Show all posts
Showing posts with label Business News. Show all posts
Tata Steel FPO opens on Jan 19
Last week, Shekhawati Poly delivered over 58% gains on its debut session. Before that it marked a high of Rs 69 against its offer price of Rs. 30, but thereafter, it hit lower circuit of 20% and last week, it close at Rs 30.45. This shows that many recent issues that managed to close with arranged funds have rescued its supporters on the listing day but thereafter, left the counter to the mercy of market operators.
The issue of Midvalley Entertainment that closed on Wednesday got an overall subscription of 4.03 times (QIB 0.35 times, HNI 4.68 times and Retail 9.01 times). C Mahendra is getting listed this week.
The secondary market has slipped sharply in past two weeks, losing 1649.46 points and bringing the primary market under pressure. Amidst the turmoil, IDFC is offering Infra Bonds that has AAA ratings and a yield of over 13 to 17 per cent depending on the tenure. It is a welcome step that the Tata group is planning an FPO for its steel major this week that would bring rewards for investors in medium to long term.
Tata Steel Ltd, promoted by Tata Sons Ltd, is India's largest private sector steel companies with a steel production capacity of approximately 27.2 mtpa. It has a presence across the entire value chain of the sector that includes even mining and processing iron ore and coal for its steel production. The company is the seventh largest steel company globally in terms of crude steel production volume in 2009.
In 2010, its operations in Europe and India represented 62.9% and 28.8%, respectively, of its total steel production. The company serves the construction, automotive, aerospace, consumer goods and material handling and general engineering industries.
It is coming out with a FPO of 5.7 crore equity share of Rs. 10 each within a price band of Rs. 594- 610 to mobilize around Rs. 3400 crore. The funds so mobilized will be used partly to finance the Company's share of capital expenditure for expansion of existing works at Jamshedpur and partly to retire debt besides other general corporate purpose. For H1 of current fiscal, it earned a net profit of Rs. 3758.42 crore on a turnover of Rs.
56713.61 crore. For the entire 09- 10, the company posted a loss of Rs. 2120.84 crore on a turnover of Rs. 103578.97 crore. Thus, the company is out of the woods now and its global acquisitions are bearing fruits.
This book building process opens on Jan 19 and closes on Jan 21. Shares will be listed on BSE and NSE. Lead BRLMs for this offer are Citigroup Global Markets India Private Limited, Deutsche Equities India Private Limited, HSBC Securities & Capital Markets Pvt Ltd, Kotak Mahindra Capital Company Limited, SBI Capital Markets Limited, Royal Bank of Scotland Plc, and Standard Chartered Securities (India) Limited. Registrar to the issue is Link Intime India Pvt. Ltd. Anchor Investor's book will open one day prior to the main offer.
The issue of Midvalley Entertainment that closed on Wednesday got an overall subscription of 4.03 times (QIB 0.35 times, HNI 4.68 times and Retail 9.01 times). C Mahendra is getting listed this week.
The secondary market has slipped sharply in past two weeks, losing 1649.46 points and bringing the primary market under pressure. Amidst the turmoil, IDFC is offering Infra Bonds that has AAA ratings and a yield of over 13 to 17 per cent depending on the tenure. It is a welcome step that the Tata group is planning an FPO for its steel major this week that would bring rewards for investors in medium to long term.
Tata Steel Ltd, promoted by Tata Sons Ltd, is India's largest private sector steel companies with a steel production capacity of approximately 27.2 mtpa. It has a presence across the entire value chain of the sector that includes even mining and processing iron ore and coal for its steel production. The company is the seventh largest steel company globally in terms of crude steel production volume in 2009.
In 2010, its operations in Europe and India represented 62.9% and 28.8%, respectively, of its total steel production. The company serves the construction, automotive, aerospace, consumer goods and material handling and general engineering industries.
It is coming out with a FPO of 5.7 crore equity share of Rs. 10 each within a price band of Rs. 594- 610 to mobilize around Rs. 3400 crore. The funds so mobilized will be used partly to finance the Company's share of capital expenditure for expansion of existing works at Jamshedpur and partly to retire debt besides other general corporate purpose. For H1 of current fiscal, it earned a net profit of Rs. 3758.42 crore on a turnover of Rs.
56713.61 crore. For the entire 09- 10, the company posted a loss of Rs. 2120.84 crore on a turnover of Rs. 103578.97 crore. Thus, the company is out of the woods now and its global acquisitions are bearing fruits.
This book building process opens on Jan 19 and closes on Jan 21. Shares will be listed on BSE and NSE. Lead BRLMs for this offer are Citigroup Global Markets India Private Limited, Deutsche Equities India Private Limited, HSBC Securities & Capital Markets Pvt Ltd, Kotak Mahindra Capital Company Limited, SBI Capital Markets Limited, Royal Bank of Scotland Plc, and Standard Chartered Securities (India) Limited. Registrar to the issue is Link Intime India Pvt. Ltd. Anchor Investor's book will open one day prior to the main offer.
Blackberry RIM says still no access to secure corporate emails
Blackberry maker Research in Motion (RIM) has refused to provide full access to Indian security agencies and has limited it to the messenger service only denying its coveted secure corporate emails.
India wants access to all BlackBerry services as part of efforts to fight militancy and security threats over the Internet and through telephone communications.
Last month, home secretary G. K. Pillai had stated that the Centre was talking to firms that use BlackBerry to gain access to their employees’ secure communications when it was deemed necessary.
“ No changes can be made to the security architecture for Black- Berry Enterprise Server customers, since contrary to any rumours the security architecture is the same around the world and RIM truly has no ability to provide its customers’ encryption keys,” the company said on Thursday.
It reiterated that no changes could be made to allow monitoring of secure corporate emails.
Late last year, the company managed to avert a ban in India by offering interim access to Black- Berry Messenger and promising a broader solution by January 31.
The Centre had extended the deadline to RIM for providing a final solution by January 2011 on giving access to security agencies to its popular messenger and enterprise services (corporate emails). It had first extended the August 31 deadline to October 31 and then to December 31.
RIM has been buffeted by demands for access to its encrypted data from several countries worried about security and social mores. Last year, the company narrowly escaped bans in Saudi Arabia and the United Arab Emirates.
India wants access to all BlackBerry services as part of efforts to fight militancy and security threats over the Internet and through telephone communications.
Last month, home secretary G. K. Pillai had stated that the Centre was talking to firms that use BlackBerry to gain access to their employees’ secure communications when it was deemed necessary.
“ No changes can be made to the security architecture for Black- Berry Enterprise Server customers, since contrary to any rumours the security architecture is the same around the world and RIM truly has no ability to provide its customers’ encryption keys,” the company said on Thursday.
It reiterated that no changes could be made to allow monitoring of secure corporate emails.
Late last year, the company managed to avert a ban in India by offering interim access to Black- Berry Messenger and promising a broader solution by January 31.
The Centre had extended the deadline to RIM for providing a final solution by January 2011 on giving access to security agencies to its popular messenger and enterprise services (corporate emails). It had first extended the August 31 deadline to October 31 and then to December 31.
RIM has been buffeted by demands for access to its encrypted data from several countries worried about security and social mores. Last year, the company narrowly escaped bans in Saudi Arabia and the United Arab Emirates.
Ratan Tata likely to lose in every scenario
Ratan Tata may have approached the Supreme Court for securing his privacy in the backdrop of the leak of Radia tapes but he may end up like a tragic hero in William Shakespeare’s plays.
With the judgment in his case likely to set out the ambit and scope of the right to privacy, his privacy will be violated every time his case is cited or relied upon as a precedent in the future. More so, when some of the conversations to which he has objections have already reached the public domain.
Every time his case is cited as a precedent, the taped conversations published in newspapers, magazines, web portals and those finding a place in the judgment itself are likely to be read out or recalled. This reminds one of a statement by Brutus — How many times shall Caesar bleed in sport? — that Julius Caesar would be killed every time a play was enacted on his tragical story.
At the same time, a judgment in Ratan Tata’s favour will surely go a long way in protecting the coveted right of similarly placed people in the future.
With some of the Radia- Tata conversations having already been published and there being no bar on further publication at the moment, Tata seems to have already lost his case for all practical purposes. Tata has to battle another anomaly associated with such a petition — he would have to point out during the hearings as to which conversations, according to him, were private, an exercise that can hardly be deemed pleasurable.
All this, however, should not make one underestimate the relevance the case holds for the future.
With the judgment in his case likely to set out the ambit and scope of the right to privacy, his privacy will be violated every time his case is cited or relied upon as a precedent in the future. More so, when some of the conversations to which he has objections have already reached the public domain.
Every time his case is cited as a precedent, the taped conversations published in newspapers, magazines, web portals and those finding a place in the judgment itself are likely to be read out or recalled. This reminds one of a statement by Brutus — How many times shall Caesar bleed in sport? — that Julius Caesar would be killed every time a play was enacted on his tragical story.
At the same time, a judgment in Ratan Tata’s favour will surely go a long way in protecting the coveted right of similarly placed people in the future.
With some of the Radia- Tata conversations having already been published and there being no bar on further publication at the moment, Tata seems to have already lost his case for all practical purposes. Tata has to battle another anomaly associated with such a petition — he would have to point out during the hearings as to which conversations, according to him, were private, an exercise that can hardly be deemed pleasurable.
All this, however, should not make one underestimate the relevance the case holds for the future.
TATA too run into eco hurdle
The Tatas’ proposal to set up two 80 MW captive power plants in Jharkhand for their steel plant has run into an Environment and Forest Ministry hurdle.
The ministry has asked Tata Steels, formerly Tata Iron and Steel Company, to first get it cleared from the Coal Ministry and conduct a public hearing to elicit the locals’ view, which was mandatory under the EIA Notification 2006.
The Environment Ministry’s Expert Appraisal Committee felt the Coal Ministry’s approval was necessary as the proposed power plant is coal- based and is to be set up in a coal- bearing region.
Tata Steel has proposed that the project be set up in Ramgarh district in 30 acres of land, including 10.5 acres of forest land, to meet power needs of its steel plants.
The company has been also asked to furnish a detailed study on impact on marine ecology due to the discharge of treated waste water into the river and shift the proposed ash pond away from any surface water source, lest it contaminates the region.
The ministry has asked Tata Steels, formerly Tata Iron and Steel Company, to first get it cleared from the Coal Ministry and conduct a public hearing to elicit the locals’ view, which was mandatory under the EIA Notification 2006.
The Environment Ministry’s Expert Appraisal Committee felt the Coal Ministry’s approval was necessary as the proposed power plant is coal- based and is to be set up in a coal- bearing region.
Tata Steel has proposed that the project be set up in Ramgarh district in 30 acres of land, including 10.5 acres of forest land, to meet power needs of its steel plants.
The company has been also asked to furnish a detailed study on impact on marine ecology due to the discharge of treated waste water into the river and shift the proposed ash pond away from any surface water source, lest it contaminates the region.
Toyota Etios at attractive price enters Swift Dzire Market
Toyota has a typical late entry strategy around the world. India is no different, so they were one of the last manufacturers to enter the country. Having launched the extremely successful Qualis, the Japanese major got into all segments — the mid-size with Corolla, the luxury end with Camry, the SUV market with Fortuner and the super-luxury SUV category with Prado and Land Cruiser. None could match the success of Qualis, and its successor, Innova.Enter, Etios. Toyota’s first foray into the economy segment, Etios is a “conceivedfor- India” car. The challenge was to have a car that let consumers get the famous Toyota quality without paying a high price for it. Think of it as single malt whisky at rum prices. The challenge was tough, but the rewards were just as lucrative: the estimated 2,50,000-unit demand for such cars in the lower category of hatchbacks, notchbacks and small sedans. At present, in the segment that Etios is entering, the Lord and the Master is Maruti with its Swift Dzire, which has managed to draw long booking queues even two years after its launch!
So what exactly makes the Etios unique? For starters, it’s the brilliant packaging of the product. It may not appear to be large from the outside, but peek inside and you’ll find cavernous space, which means three large adults can comfortably lounge at the back. The front seats are also comfortable — in fact, the lumbar support they offer makes them better than what you get in many super-premium cars.
The instrument console is centrally mounted for the first time in a vehicle in this segment and the dials look sexy at night with their white back-lighting in a semi-circular design. The chief engineer of the Etios project, Yoshinori Noritake, said: “We learnt that Indian customers are price conscious but at the same time want space and comfort for their family, and style to enhance their status.” Intelligent touches abound in Etios.
It has a large air-con vent in the central console that cools the rear-seat passengers very well. The flat-bottomed steering wheel is so welldesigned that even dimensionally challenged people can slip in easily.
Like any other great product, Etios too has minor drawbacks. First, you have to adjust the outer rear-view mirrors by hand. My second complaint is that some of the higher-end models have flashes of red inside, which sometimes do not appeal to even the most passionately inclined amongst us. The headlights look a tad small and the single wiper sticks out like a sore thumb.
So far we have not talked about the power plant. The Etios comes with a standard 1,500cc engine, which gives around 90 horses and 132Nm of torque. In plain English it means a sufficiently endowed engine that may not win 0-100kmph contests but delivers a claimed 17.6kmpl of fuel average! Bookings open now, deliveries start in January.
IOC plans FPO at Rs 450 per share in Jan’11
Indian Oil Corp (IOC) is looking at a price of Rs 450 per share for its follow- on public offering ( FPO), which is expected to hit the market in January next year, company chairman B. M. Bansal said on Wednesday.
Bansal said, “ We expect the pricing to be around Rs 450 per share.” This is higher than IOC’s current stock price. Reacting to Bansal’s comment IOC share shot up by 14.32 per cent to Rs 395.75 before settling at Rs 383.10 on Wednesday.
He said the FPO, in which the government will divest its 10 per cent share and IOC sell an equal number of fresh shares, was likely in the third or fourth week of January.
IOC has hired six banks — Merrill Lynch, Citigroup, ICICI Securities, Morgan Stanley, SBI Capital and UBS — to handle the public offer.
Bansal said the FPO will raise about Rs 20,000 crore and the government and IOC will get Rs 10,000 crore each.
The company plans to infuse the funds into its grassroots petrochemical project at Paradip in Orissa and liquefied natural gas terminal at Ennore in Tamil Nadu.
The Centre plans to sell shares in IOC and ONGC to raise Rs 40,000 crore to fund infrastructure projects and cut its fiscal deficit.
Bansal said, “ We expect the pricing to be around Rs 450 per share.” This is higher than IOC’s current stock price. Reacting to Bansal’s comment IOC share shot up by 14.32 per cent to Rs 395.75 before settling at Rs 383.10 on Wednesday.
He said the FPO, in which the government will divest its 10 per cent share and IOC sell an equal number of fresh shares, was likely in the third or fourth week of January.
IOC has hired six banks — Merrill Lynch, Citigroup, ICICI Securities, Morgan Stanley, SBI Capital and UBS — to handle the public offer.
Bansal said the FPO will raise about Rs 20,000 crore and the government and IOC will get Rs 10,000 crore each.
The company plans to infuse the funds into its grassroots petrochemical project at Paradip in Orissa and liquefied natural gas terminal at Ennore in Tamil Nadu.
The Centre plans to sell shares in IOC and ONGC to raise Rs 40,000 crore to fund infrastructure projects and cut its fiscal deficit.
MOIL IPO subscription oversubscribed 29 times
On the one hand, the IPO of Claris Lifescience Ltd. got extended with price band reduced by 20% i. e. the original price band of Rs. 278- 293 to Rs. 228- 235. Despite this, the issue got just around 43% subscription till November 30. Thus pricing greed has once again surfaced and the lead manager's team has failed in its expertise to guide the promoter on pricing issues.
But, MOIL issue was oversubscribed to the tune of 29.10 times with QIB subscribed 49.16 times, HNI 8.77 times, Retail 10.86 times and Employees 0.20 times. This week we had two issues that included SCI and One 97 Communication Ltd.
Due to market turmoil, One 97 has announced delaying its IPO by 12 days and has not yet decided on the price band.
But, MOIL issue was oversubscribed to the tune of 29.10 times with QIB subscribed 49.16 times, HNI 8.77 times, Retail 10.86 times and Employees 0.20 times. This week we had two issues that included SCI and One 97 Communication Ltd.
Due to market turmoil, One 97 has announced delaying its IPO by 12 days and has not yet decided on the price band.
Toyota Etios may start a sedan price war in India
The entry of Toyota, the world’s biggest car-maker, into the Indian entry- level sedan market has sent car-makers scrambling to work out fresh plans for the hitherto neglected sedan segment.
While Toyota will be launching the Etios, its foray into entry level sedan segment, on Wednesday, another Japanese major Nissan has also said that it is readying a new sedan based on a completely new platform for the Indian market for launch next year. What has set the cat among the pigeons is Toyota’s aggressive pricing strategy, clearly aimed at garnering volumes.
Toyota Kirloskar Motors Ltd (TKM), Toyota’s India joint venture which will be manufacturing the Etios, has said the car will be priced at Rs 5.25 lakh for the base variant. This will pitch it head on against Maruti Suzuki, which dominates the entry sedan segment with its Swift DZire, and Tata Motors’ Indigo and Indigo CS variants. Ford is the only other player with a model in a similar price range. But its outdated Ikon model has been steadily losing market share, as has Hyundai’s dated Accent model. Maruti Suzuki, phased out the bestselling Esteem a few years ago.
TKM has invested Rs 3,200 crore on a new manufacturing plant near Bangalore, with an annual capacity of 70,000 units, keeping in mind this new model. Considered to be one of the most ambitious projects from Toyota, this car, which has a 1500 cc petrol engine, will face plenty of competition.
Apart from existing models like Maruti Swift D’Zire, Hyundai Accent, Tata Indigo, Tata Manza and the Ford Ikon, Volkswagen has also launched the Vento, which has base variants which are comparably priced.
Market watchers feel that Etios’ lucrative price has already started troubling other auto makers as it is also likely to affect the market share of hatchbacks within the same price range, such as Hyundai i20, Maruti Swift, Ford Figo and Volkswagen’s Polo.
“ We are very excited about the launch. We are sure the customers will be very happy. Reviews are very good and we expect it will be a game changer in the entry level sedan market,” said Sandeep Singh, deputy managing director ( marketing), TKM. Singh, however, declined to comment on the price. “ The exact price of the car will be announced only on December 1. Before that we do not want comment on price. Just wait for the launch,” he said.
TKM targets to sell 70,000 units of Etios in the first year. Also, after the success of its hatchback Micra, Japanese carmaker Nissan is now planning to bring an entry- level sedan model to the Indian market.
Nissan Sunny, designed especially for the Chinese and the India markets, is expected to be launched next year. “ We are waiting for the response of Etios in the market. We will try to keep our price competitive, so that it can take on the existing competition. But it will certainly be below Rs 6 lakh,” an official from Nissan Motors Co Ltd said .
According to sources even General Motors is planning to launch a new entry- level sedan in the Indian market by 2011. “ The last year has seen a host of launches in the luxury hatchbacks segment. The following years will be the dominated by entry- level sedans. There has hardly been any exciting offering in this segment,” a senior official from General Motors said.
While Toyota will be launching the Etios, its foray into entry level sedan segment, on Wednesday, another Japanese major Nissan has also said that it is readying a new sedan based on a completely new platform for the Indian market for launch next year. What has set the cat among the pigeons is Toyota’s aggressive pricing strategy, clearly aimed at garnering volumes.
Toyota Kirloskar Motors Ltd (TKM), Toyota’s India joint venture which will be manufacturing the Etios, has said the car will be priced at Rs 5.25 lakh for the base variant. This will pitch it head on against Maruti Suzuki, which dominates the entry sedan segment with its Swift DZire, and Tata Motors’ Indigo and Indigo CS variants. Ford is the only other player with a model in a similar price range. But its outdated Ikon model has been steadily losing market share, as has Hyundai’s dated Accent model. Maruti Suzuki, phased out the bestselling Esteem a few years ago.
TKM has invested Rs 3,200 crore on a new manufacturing plant near Bangalore, with an annual capacity of 70,000 units, keeping in mind this new model. Considered to be one of the most ambitious projects from Toyota, this car, which has a 1500 cc petrol engine, will face plenty of competition.
Apart from existing models like Maruti Swift D’Zire, Hyundai Accent, Tata Indigo, Tata Manza and the Ford Ikon, Volkswagen has also launched the Vento, which has base variants which are comparably priced.
Market watchers feel that Etios’ lucrative price has already started troubling other auto makers as it is also likely to affect the market share of hatchbacks within the same price range, such as Hyundai i20, Maruti Swift, Ford Figo and Volkswagen’s Polo.
“ We are very excited about the launch. We are sure the customers will be very happy. Reviews are very good and we expect it will be a game changer in the entry level sedan market,” said Sandeep Singh, deputy managing director ( marketing), TKM. Singh, however, declined to comment on the price. “ The exact price of the car will be announced only on December 1. Before that we do not want comment on price. Just wait for the launch,” he said.
TKM targets to sell 70,000 units of Etios in the first year. Also, after the success of its hatchback Micra, Japanese carmaker Nissan is now planning to bring an entry- level sedan model to the Indian market.
Nissan Sunny, designed especially for the Chinese and the India markets, is expected to be launched next year. “ We are waiting for the response of Etios in the market. We will try to keep our price competitive, so that it can take on the existing competition. But it will certainly be below Rs 6 lakh,” an official from Nissan Motors Co Ltd said .
According to sources even General Motors is planning to launch a new entry- level sedan in the Indian market by 2011. “ The last year has seen a host of launches in the luxury hatchbacks segment. The following years will be the dominated by entry- level sedans. There has hardly been any exciting offering in this segment,” a senior official from General Motors said.
Mobile Number Portability (MNP) is a test case for operators
The Mobile Number Portability (MNP) service, which was launched in Haryana on Thursday, is being seen as a test case by mobile operators, who have planned various campaigns including ad campaigns based on the MNP in the next few weeks in the backdrop of the government announcing pan- India MNP rollout on January 20 next year.
Idea Cellular is the first off the block launch its MNP- based ad campaign. It is called ‘ Switch to Idea’. The telecom industry feels that after the full roll- out of MNP, the sector would see reduction in prices for premium services like SMS, data services and roaming charges. Currently, around 10 per cent of the overall revenue in the telecom industry is generated from these services. However, not much change is immediately expected in voice services (calling charges).
Service providers also say that midtier consumers in both pre- paid and post- paid segments will most likely switch their operators with the onset of MNP, considering that the churn in the low- end of the market is very high.
Industry estimates say there is a monthly churn of two per cent among the post- paid customers while the prepaid segment sees a churn of five to six per cent, the highest in the world.
A lot will also depend on 3G also. Operators who don’t have 3G may be the most hit as high- end subscribers would like to switch to 3G- ready operators while rural subscribers will look for those operators with better coverage.
One in four Reliance Communications (RCom) and Tata Indicom subscribers will be keen to change their operator when MNP is introduced, followed by about one in five (19 per cent) of BSNL subscribers. RCom risks losing 25 per cent of its subscribers, that is, about 21 million users, who intend to move to another operator.
Idea Cellular is the first off the block launch its MNP- based ad campaign. It is called ‘ Switch to Idea’. The telecom industry feels that after the full roll- out of MNP, the sector would see reduction in prices for premium services like SMS, data services and roaming charges. Currently, around 10 per cent of the overall revenue in the telecom industry is generated from these services. However, not much change is immediately expected in voice services (calling charges).
Service providers also say that midtier consumers in both pre- paid and post- paid segments will most likely switch their operators with the onset of MNP, considering that the churn in the low- end of the market is very high.
Industry estimates say there is a monthly churn of two per cent among the post- paid customers while the prepaid segment sees a churn of five to six per cent, the highest in the world.
A lot will also depend on 3G also. Operators who don’t have 3G may be the most hit as high- end subscribers would like to switch to 3G- ready operators while rural subscribers will look for those operators with better coverage.
One in four Reliance Communications (RCom) and Tata Indicom subscribers will be keen to change their operator when MNP is introduced, followed by about one in five (19 per cent) of BSNL subscribers. RCom risks losing 25 per cent of its subscribers, that is, about 21 million users, who intend to move to another operator.
LIC Housing Finance CEO Arrested, Major Coporate Loan Scam Busted
The CEO of LIC Housing Finance Ramachandran Nair was on Monday arrested by the CBI in a case that shook the stock markets but was later down played as an individual case of bribery for facilitating “ large scale corporate loans”. Nair was among eight persons arrested by the CBI as investigation teams fanned out across multi city locations and ransacked the offices of bankers, financiers and others, and registered as many as five cases.
Among those arrested by the CBI was the Chairman and Managing Director of a private financial company called Money Matters Financial Services Limited, Rajesh Sharma, two of his colleagues, Suresh Gattani and Sanjay Sharma, and four high level managers of top public sector banks.
The arrested bankers were Naresh K Chopra, Secretary ( Investment), LIC; R N Tayal, General Manager of Bank of India ( Delhi); Maninder Singh Johar, Director ( Chartered Accountant) of Central Bank of India; and Venkoba Gujjal, Dy General Manager of Punjab National Bank ( Delhi).
All the accused were booked under the Prevention of Corruption Act. The raids in Mumbai, Delhi, Chennai, Jaipur, Kolkata and Jalandhar had their impact on the stock market in Mumbai, where the Sensex suddenly slipped into the red. It closed the day down 1.18 per cent at 19459.85, a fall of 232 points.
The CBI said it was a thriving racket in which officials of the private financial company bribed bank officials to secure huge corporate loans, apart from gleaning confidential business information. The information was reportedly related to investment decisions in specific stocks by large financial institutions, which was sensitive and would enable traders to unfairly play the market.
“ Officers of top and middle management of various public sector banks and financial institutions were receiving illegal gratification from the private financial services company, which was acting as a mediator and facilitator for corporate loans,’’ the CBI said in a statement.
The raids led to fears of deeper linkages that could spook the stock markets, which are already trading nervously in the midst of the Korean flare- up, the European financial crisis and the telecom scam.
But in the evening the government announced that the arrests were in a case of bribery and would not impact the asset quality of the banks. “It’s an individual case of bribery. There is no large- scale scam. Banking system is sound,” Minister of State for Finance Namo Narain Meena told reporters in New Delhi.
Among those arrested by the CBI was the Chairman and Managing Director of a private financial company called Money Matters Financial Services Limited, Rajesh Sharma, two of his colleagues, Suresh Gattani and Sanjay Sharma, and four high level managers of top public sector banks.
The arrested bankers were Naresh K Chopra, Secretary ( Investment), LIC; R N Tayal, General Manager of Bank of India ( Delhi); Maninder Singh Johar, Director ( Chartered Accountant) of Central Bank of India; and Venkoba Gujjal, Dy General Manager of Punjab National Bank ( Delhi).
All the accused were booked under the Prevention of Corruption Act. The raids in Mumbai, Delhi, Chennai, Jaipur, Kolkata and Jalandhar had their impact on the stock market in Mumbai, where the Sensex suddenly slipped into the red. It closed the day down 1.18 per cent at 19459.85, a fall of 232 points.
The CBI said it was a thriving racket in which officials of the private financial company bribed bank officials to secure huge corporate loans, apart from gleaning confidential business information. The information was reportedly related to investment decisions in specific stocks by large financial institutions, which was sensitive and would enable traders to unfairly play the market.
“ Officers of top and middle management of various public sector banks and financial institutions were receiving illegal gratification from the private financial services company, which was acting as a mediator and facilitator for corporate loans,’’ the CBI said in a statement.
The raids led to fears of deeper linkages that could spook the stock markets, which are already trading nervously in the midst of the Korean flare- up, the European financial crisis and the telecom scam.
But in the evening the government announced that the arrests were in a case of bribery and would not impact the asset quality of the banks. “It’s an individual case of bribery. There is no large- scale scam. Banking system is sound,” Minister of State for Finance Namo Narain Meena told reporters in New Delhi.
Bharti Airtel new tune and logo unveiled after it crosses 20 cr user base
Bharti Airtel on Thursday unveiled its new logo and the new signature Airtel tune, composed by Oscar winner A. R. Rehman to mark its subscriber base crossing the 20- crore mark.“ Today as we expand on the global stage this new brand identity gives us the opportunity to present a single powerful and unified face to our customers, stakeholders and partners around the world. We now have 15 crore Indian subscribers and over four crore users in Africa, while the rest are in Bangladesh and Sri Lanka,” Bharti Airtel chairman and managing director (MD) Sunil Bharti Mittal said while unveiling its new ‘ global and youthful avatar’.
A R Rahman has given some changes to the trademark tune of Airtel making it more youthful and dynamic in line with the new visual identity. The earlier tune of Airtel was downloaded more than 150 million times which proves the strength of Rahman and Bharti. The new tune retains the essence of the original but uses an inspiring musical style, with a universal appeal, that will be loved by listeners the world over.
Earlier this year, the company had acquired the African operations of Kuwait’s Zain Group in 15 countries at an enterprise value of around Rs 50,000 crore ($ 10.7 billion). It is now the world’s fifth largest telecom company.
The re- designed logo would be for the Indian as well as overseas markets to bring operational synergy across the company’s business ventures. Although the company declined to share investment figures, it indicated that the branding exercise would be expensive. The brand launch in India will be followed by launches in Africa, Sri Lanka and Bangladesh.
Power Grid FPO allotment date soon, listing on November 23
The chairman and managing director of Power Grid Corporation, S K Chaturvedi has announced that that the equity shares of Power Grid Corporation would be listed on exchanges on November 23, 2010. Power Grid is expected to raise around USD 1.7 billion via held recently follow-on public offer (FPO).
However the date of the for the basis of allotment is yet to be determined. Power Grid Corp of India's follow-on-offer to raise as much $ 1.7 billion was subscribed by 14.88 times as investors found compelling reasons to participate in India’s power story. The offer attracted bids worth $ 9.3 billion from foreign investors, exchange data showed, powered by record fund inflows into Indian shares this year.
Institutions subscribed for 18.5 times the shares on offer to them, while the non- institutional and retail portions of the deal were subscribed 1.6 times and 0.7 times, respectively.
Most bids came at the top-end of the 85-90 rupees price range, data showed.
The world's third- largest power transmission company operates 95 % of India's interstate network, carrying half of all power generated in the country. The Power Grid sale comes after a highly successful $3.4 billion IPO of state run Coal India. Shares of Power Grid ended 0.78 % down at Rs 101.20.
However the date of the for the basis of allotment is yet to be determined. Power Grid Corp of India's follow-on-offer to raise as much $ 1.7 billion was subscribed by 14.88 times as investors found compelling reasons to participate in India’s power story. The offer attracted bids worth $ 9.3 billion from foreign investors, exchange data showed, powered by record fund inflows into Indian shares this year.
Institutions subscribed for 18.5 times the shares on offer to them, while the non- institutional and retail portions of the deal were subscribed 1.6 times and 0.7 times, respectively.
Most bids came at the top-end of the 85-90 rupees price range, data showed.
The world's third- largest power transmission company operates 95 % of India's interstate network, carrying half of all power generated in the country. The Power Grid sale comes after a highly successful $3.4 billion IPO of state run Coal India. Shares of Power Grid ended 0.78 % down at Rs 101.20.
Mahindra Satyam Results to be revealed today
Mahindra Satyam after competing in tough times, is ready to post its financial results of first two quarter results of 2010. As per the official news from the Satyam, Financial results for the quarters ended June 30, 2010 and September 30, 2010 would be released today on November 15, 2010.
If sources are to be believed, analysts expect the revenue to be at USD 1.2 - 1.3 billion for fiscal year 2011. The company did not disclose its financial results after a set-back provided by the shocking Rs 7,800 crore accounting fraud by Satyam chief B Ramalinga Raju in January 2009. He had revealed a shocking Rs 7,800 crore worth accounting fraud.
Back in 2009-10, Satyam had reported a loss of Rs 125 crore for the year ended 2009-10. In September, Mahindra Satyam had decided to de-list from the New York Stock Exchange (NYSE) as it was not able to meet the October 15 deadline to prepare financial statements as per US accounting standards for the fiscal years 2008-09 and 2009-10, however it is also noteworthy that Mahindra Satyam was the only visible sponsor from India in the FIFA World cup 2010 held in South Africa.
If sources are to be believed, analysts expect the revenue to be at USD 1.2 - 1.3 billion for fiscal year 2011. The company did not disclose its financial results after a set-back provided by the shocking Rs 7,800 crore accounting fraud by Satyam chief B Ramalinga Raju in January 2009. He had revealed a shocking Rs 7,800 crore worth accounting fraud.
Back in 2009-10, Satyam had reported a loss of Rs 125 crore for the year ended 2009-10. In September, Mahindra Satyam had decided to de-list from the New York Stock Exchange (NYSE) as it was not able to meet the October 15 deadline to prepare financial statements as per US accounting standards for the fiscal years 2008-09 and 2009-10, however it is also noteworthy that Mahindra Satyam was the only visible sponsor from India in the FIFA World cup 2010 held in South Africa.
HCL Infosystems Q1 profit plunges by 19.5%
HCL Infosystems on Wednesday reported a 19.5 per cent decline in its consolidated net profit at Rs.47.46 crore for the first quarter ended September 30 from Rs.58.97 crore in the year- ago quarter.
The consolidated revenue for the quarter under review stood at Rs.2,990.7 crore. While revenue from the computer systems business remained at Rs.898.9 crore, earnings from the telecommunication and office automation business for the quarter for the firm stood at Rs.53.7 crore.
HCL Infosystems reported a dip in consolidated net profit at Rs.47.5 crore for quarterended September from Rs.59 crore during the same period last year. Its consolidated net sales also declined at Rs.2,959.4 crore as against Rs.2,999 crore on year- onyear ( YoY) basis.
Ajay Chaudhary, chairman, HCL Infosystems said, “ This is nothing unusual as traditionally our April to June quarter always gets better results as most of the government orders come during that period.”
The consolidated revenue for the quarter under review stood at Rs.2,990.7 crore. While revenue from the computer systems business remained at Rs.898.9 crore, earnings from the telecommunication and office automation business for the quarter for the firm stood at Rs.53.7 crore.
HCL Infosystems reported a dip in consolidated net profit at Rs.47.5 crore for quarterended September from Rs.59 crore during the same period last year. Its consolidated net sales also declined at Rs.2,959.4 crore as against Rs.2,999 crore on year- onyear ( YoY) basis.
Ajay Chaudhary, chairman, HCL Infosystems said, “ This is nothing unusual as traditionally our April to June quarter always gets better results as most of the government orders come during that period.”
Government fixes Coal India IPO price at Rs 245 per share
The Government has decided to fix the price of the Coal India Ltd (CIL) initial public offering (IPO) at Rs. 245 per share, which is the upper limit of the price band, in view of the overwhelming response received by the public offering.
“ Qualified institutional buyers (QIBs) for whom there was a reservation of 50 per cent of the shares had oversubscribed by as much as 24.7 times. They had put in bids of a phenomenal Rs. 1,72,000 crore. In the retail segment 16.45 lakh applications were received, which is the highest amongst the PSU IPOs so far,” coal minister Shri Prakash Jaiswal said.
“ The amount flowing in is more than over Rs. 11,000 crore. This is also the highest so far in the Indian capital market and will enable it to rake in Rs. 15,200 crore,” the minister added.
The amount of Rs. 15,200 crore mopped up from the IPO will form part of the targeted Rs. 40,000 crore income from the government’s disinvestment programme.
These funds will be utilised for infra and development programmes in the rural areas. “ It is unfortunate that the workers were not allowed to participate as the trade unions could not purchase the shares as the politics of the trade union leaders came into play,” he said.
CIL chairman Partha S. Bhattacharyya said, “ The company has a war chest of Rs. 6,000 crore for making equity investments in three overseas firms.” CIL is looking at companies in Australia, Indonesia, S. Africa and the US. He said three coal mining firms in these nations were under consideration but refused to share any details due to the confidentially clause in the negotiations.
The minister said the fact that CIL is the holder of the world’s largest coal reserves and largest producer, is one of the lowest- cost coal mining firms with a professional management aiming at a high growth trajectory both in projection and profits, was appreciated by investors globally.
“ Qualified institutional buyers (QIBs) for whom there was a reservation of 50 per cent of the shares had oversubscribed by as much as 24.7 times. They had put in bids of a phenomenal Rs. 1,72,000 crore. In the retail segment 16.45 lakh applications were received, which is the highest amongst the PSU IPOs so far,” coal minister Shri Prakash Jaiswal said.
“ The amount flowing in is more than over Rs. 11,000 crore. This is also the highest so far in the Indian capital market and will enable it to rake in Rs. 15,200 crore,” the minister added.
The amount of Rs. 15,200 crore mopped up from the IPO will form part of the targeted Rs. 40,000 crore income from the government’s disinvestment programme.
These funds will be utilised for infra and development programmes in the rural areas. “ It is unfortunate that the workers were not allowed to participate as the trade unions could not purchase the shares as the politics of the trade union leaders came into play,” he said.
CIL chairman Partha S. Bhattacharyya said, “ The company has a war chest of Rs. 6,000 crore for making equity investments in three overseas firms.” CIL is looking at companies in Australia, Indonesia, S. Africa and the US. He said three coal mining firms in these nations were under consideration but refused to share any details due to the confidentially clause in the negotiations.
The minister said the fact that CIL is the holder of the world’s largest coal reserves and largest producer, is one of the lowest- cost coal mining firms with a professional management aiming at a high growth trajectory both in projection and profits, was appreciated by investors globally.
TCS Q2 Results 2010 : 32% surge in net at Rs 2169 crore
TATA Consultancy Services (TCS) on Thursday reported a 32 per cent rise in net profit at Rs. 2,169.21 crore for the second quarter- ended September 30, 2010 on strong global demand.
The company’s revenues rose 25 per cent to Rs. 9,286 crore during the quarter. Revenue from the North American market alone crossed Rs. 4,500 crore in the second quarter, almost half of the company’s revenue. The board has proposed an interim dividend of Rs. 2 per equity share on a face value of Rs. 1 each.
“ It has been a quarter of superior performance across the board, driven by volume growth of over 11 per cent. In uncertain economic conditions, our results are a milestone on the path to strong demand recovery,” N. Chandrasekaran, chief executive and managing director, TCS, said.
“ Given the growth we have achieved across all industry units, we are very positive about the global demand recovery, going forward, while being watchful in view of the macro- environment,” he added. The operating margin of the company for the September quarter was 28 per cent.
S. Mahalingam, chief financial officer ( CFO), TCS, said, “ It has been a quarter of strong revenue and margin performance all round. With our major operating currencies continuing to be volatile, we remain vigilant on this front.” According to the firm, apart from North America, business from all major markets grew in double digit terms, with Europe leading the pack.
And with the revised outlook for the industry, the firm is planning to hire more talent to cater to the increasing demand. “ Given the recovery in business demand, we will exceed the hiring target we had set for this fiscal year,” Ajoy Mukherjee, vice- president and head, global human resources, said.
The attrition rate in the July- September quarter was 14.1 per cent. At the end of the quarter, the total employee strength of the company was 174,417. “ We have had the highest quarterly gross and net addition of employees in the company’s history on the back of strong growth performance,” Mukherjee said.
The firm also hinted at increasing the pricing of its services towards the end of the year.
The company’s revenues rose 25 per cent to Rs. 9,286 crore during the quarter. Revenue from the North American market alone crossed Rs. 4,500 crore in the second quarter, almost half of the company’s revenue. The board has proposed an interim dividend of Rs. 2 per equity share on a face value of Rs. 1 each.
“ It has been a quarter of superior performance across the board, driven by volume growth of over 11 per cent. In uncertain economic conditions, our results are a milestone on the path to strong demand recovery,” N. Chandrasekaran, chief executive and managing director, TCS, said.
“ Given the growth we have achieved across all industry units, we are very positive about the global demand recovery, going forward, while being watchful in view of the macro- environment,” he added. The operating margin of the company for the September quarter was 28 per cent.
S. Mahalingam, chief financial officer ( CFO), TCS, said, “ It has been a quarter of strong revenue and margin performance all round. With our major operating currencies continuing to be volatile, we remain vigilant on this front.” According to the firm, apart from North America, business from all major markets grew in double digit terms, with Europe leading the pack.
And with the revised outlook for the industry, the firm is planning to hire more talent to cater to the increasing demand. “ Given the recovery in business demand, we will exceed the hiring target we had set for this fiscal year,” Ajoy Mukherjee, vice- president and head, global human resources, said.
The attrition rate in the July- September quarter was 14.1 per cent. At the end of the quarter, the total employee strength of the company was 174,417. “ We have had the highest quarterly gross and net addition of employees in the company’s history on the back of strong growth performance,” Mukherjee said.
The firm also hinted at increasing the pricing of its services towards the end of the year.
Coal India IPO subscription attracts huge demand, oversubscribed 1.7 times
The country’s biggest ever initial public offering (IPO) floated by Coal India Ltd (CIL) attracted a demand that was 1.7 times the number of shares on offer at the close of the second day on Tuesday. Eager buyers put in bids for 99.11 crore shares while 63.1 crore scrips were on offer, the stock exchange data showed.
The issue is priced in the range of Rs. 225 and Rs. 245 a share. At the upper end of price range the Coal India public issue will fetch Rs. 15,400 crore while at the lower end of the band it will fetch about Rs. 14,200 crore. Analysts expect the issue to be valued close to the upper band as it is being oversubscribed.
The offer closes on October 21. For institutional buyers the IPO will close on October 20. Issue price will be decided by a Group of Ministers (GoM) on October 23. Market analysts are of the view that participation from retail investors will pick up in the last two days, as they usually take a cue from institutional investors. October 21 has been kept as an additional day exclusively for retail investors to apply.
Anil Ambani Group firm Reliance Power had raised Rs. 11,500 crore through an IPO in January 2008, which was, until now the country’s biggest. The Centre is divesting 10 per cent stake in CIL, which accounts for as much as 82 per cent of the total coal production in India.
Citigroup Global Markets India, Deutsche Equities India, DSP Merrill Lynch, Enam Securities, Kotak Mahindra Capital and Morgan Stanley India are book running lead managers to the CIL IPO. The follow-on public offerings (FPO) of blue- chip public sector firms Steel Authority of India Ltd (SAIL), Indian Oil Corp (IOC) and Oil and Natural Gas Corp (ONGC) are also expected to hit the stock market between January to March next year, disinvestment secretary Sumit Bose said.
Bose indicated that the three big issues would be adjusted so that there is only one issue in each month in order to avoid overcrowding in the market. “ There is enormous appetite in the market,” he said.
However, the government will not go ahead with the public issues of trading company MMTC and steel producer Rashtriya Ispat Nigam Ltd (RINL) during the current financial year, he added.
The public offers will help both the government narrow its fiscal deficit and enable the public sector companies to raise resources for further expansion. Finance minister Pranab Mukherjee has set a target of Rs. 40,000 crore through the disinvestment route during this fiscal.
The issue is priced in the range of Rs. 225 and Rs. 245 a share. At the upper end of price range the Coal India public issue will fetch Rs. 15,400 crore while at the lower end of the band it will fetch about Rs. 14,200 crore. Analysts expect the issue to be valued close to the upper band as it is being oversubscribed.
The offer closes on October 21. For institutional buyers the IPO will close on October 20. Issue price will be decided by a Group of Ministers (GoM) on October 23. Market analysts are of the view that participation from retail investors will pick up in the last two days, as they usually take a cue from institutional investors. October 21 has been kept as an additional day exclusively for retail investors to apply.
Anil Ambani Group firm Reliance Power had raised Rs. 11,500 crore through an IPO in January 2008, which was, until now the country’s biggest. The Centre is divesting 10 per cent stake in CIL, which accounts for as much as 82 per cent of the total coal production in India.
Citigroup Global Markets India, Deutsche Equities India, DSP Merrill Lynch, Enam Securities, Kotak Mahindra Capital and Morgan Stanley India are book running lead managers to the CIL IPO. The follow-on public offerings (FPO) of blue- chip public sector firms Steel Authority of India Ltd (SAIL), Indian Oil Corp (IOC) and Oil and Natural Gas Corp (ONGC) are also expected to hit the stock market between January to March next year, disinvestment secretary Sumit Bose said.
Bose indicated that the three big issues would be adjusted so that there is only one issue in each month in order to avoid overcrowding in the market. “ There is enormous appetite in the market,” he said.
However, the government will not go ahead with the public issues of trading company MMTC and steel producer Rashtriya Ispat Nigam Ltd (RINL) during the current financial year, he added.
The public offers will help both the government narrow its fiscal deficit and enable the public sector companies to raise resources for further expansion. Finance minister Pranab Mukherjee has set a target of Rs. 40,000 crore through the disinvestment route during this fiscal.
Coal India IPO Subscription reaches 34 percent on Day 1
Coal India Ltd's Rs 15,000- crore mega initial public offer, the country's largest public issue so far, got demands for 34 % of shares on offer on the first day. The issue received maximum demands from institutional buyers, which include FIIs, insurance firms and mutual funds with 63% subscription.
In retail portion it was subscribed 10 %, the data showed. In total, the issue attracted bids for 21.3 crore shares against 63.1 crore equities on offer. The demand received on the first day is valued at Rs 5,230.41 crore at the upper end of price band. The issue is priced in the range of Rs 225 to Rs 245 per share.
The government is divesting 10 % stake in CIL, the world's largest coal producer, through this issue.The offer closes on October 21.
Primary market analysts believe participation from retail investors will pick up in the last two days, as they usually follow the trend of institutional investors.
" Most of the money, for investment in such big issue, is borrowed by banks and in such a scenario big buyers prefer to make bid on second or third day to avoid interest burden," SMC Global Securities Strategist Jagannadham Thunuguntla said. The navratna company is expected to list on the domestic bourses by November 4.
In retail portion it was subscribed 10 %, the data showed. In total, the issue attracted bids for 21.3 crore shares against 63.1 crore equities on offer. The demand received on the first day is valued at Rs 5,230.41 crore at the upper end of price band. The issue is priced in the range of Rs 225 to Rs 245 per share.
The government is divesting 10 % stake in CIL, the world's largest coal producer, through this issue.The offer closes on October 21.
Primary market analysts believe participation from retail investors will pick up in the last two days, as they usually follow the trend of institutional investors.
" Most of the money, for investment in such big issue, is borrowed by banks and in such a scenario big buyers prefer to make bid on second or third day to avoid interest burden," SMC Global Securities Strategist Jagannadham Thunuguntla said. The navratna company is expected to list on the domestic bourses by November 4.
All eyes set on Coal India IPO
There is a whisper in the market — will the Coal India Ltd (CIL) initial public offering (IPO) do to the secondary market in 2010 what the Reliance Power IPO did in 2008? The market backdrop of a Sensex level of 20,000 points plus seems to be providing a sense of déjà vu, too.
However, to my mind, no IPO, however large, can be the sole factor for a secondary market crash. In 2008, valuations were stretched and there was a sudden and somewhat unforeseen global meltdown to contend with.
Agreed, valuations in 2010 too, are not exactly comforting, but the global devil is now recognised. If the market were to correct or even crash in 2010, the IPO of CIL will certainly not be one of the major contributing factors.
To put matters in perspective, the small IPO of Career Point that sought to raise a mere Rs. 115 crore, received applications worth Rs. 5,000 crore. So, where is the debate about market depth? More importantly, CIL is a public sector undertaking ( PSU) behemoth, a ‘ Navratna’ with a solid asset base and a sound operational track record. Any comparison with Reliance Power, which was more a ‘ Power Point’ project then than any meaningful power project at the time of its public offer, is to my mind, a futile exercise.
CIL is the world’s largest coal reserve holder as well as coal producer. It operates 471 mines in 21 major coalfields across eight states in India, which includes open cast mines, underground mines and mixed mines.
While the fundamentals of the public sector company appear strong and retail investors with a long- term investment perspective can gain from participation in this IPO, the discount of a meagre five per cent for retail investors betrays a lack of vision on the part of the government and its investment bankers.
This is not to say that retail investors will not benefit from participation in this IPO. But with an ambitious PSU disinvestment plan, the government has again missed a golden opportunity to earn the goodwill of Indian retail investors, whose taxes finance the PSUs.
Ironically, there is a buzz that the government is considering allowing foreign retail participation in the Indian stock market.While that would be a positive move, the fact is, it is time to display some more care and respect for domestic retail investors.
And the Coal India IPO was the right time to get started.
However, to my mind, no IPO, however large, can be the sole factor for a secondary market crash. In 2008, valuations were stretched and there was a sudden and somewhat unforeseen global meltdown to contend with.
Agreed, valuations in 2010 too, are not exactly comforting, but the global devil is now recognised. If the market were to correct or even crash in 2010, the IPO of CIL will certainly not be one of the major contributing factors.
To put matters in perspective, the small IPO of Career Point that sought to raise a mere Rs. 115 crore, received applications worth Rs. 5,000 crore. So, where is the debate about market depth? More importantly, CIL is a public sector undertaking ( PSU) behemoth, a ‘ Navratna’ with a solid asset base and a sound operational track record. Any comparison with Reliance Power, which was more a ‘ Power Point’ project then than any meaningful power project at the time of its public offer, is to my mind, a futile exercise.
CIL is the world’s largest coal reserve holder as well as coal producer. It operates 471 mines in 21 major coalfields across eight states in India, which includes open cast mines, underground mines and mixed mines.
While the fundamentals of the public sector company appear strong and retail investors with a long- term investment perspective can gain from participation in this IPO, the discount of a meagre five per cent for retail investors betrays a lack of vision on the part of the government and its investment bankers.
This is not to say that retail investors will not benefit from participation in this IPO. But with an ambitious PSU disinvestment plan, the government has again missed a golden opportunity to earn the goodwill of Indian retail investors, whose taxes finance the PSUs.
Ironically, there is a buzz that the government is considering allowing foreign retail participation in the Indian stock market.While that would be a positive move, the fact is, it is time to display some more care and respect for domestic retail investors.
And the Coal India IPO was the right time to get started.
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