The government on Tuesday said the initial public offering of the national carrier Air India would come "at an appropriate time" after looking at the performance of the airline.

"We will have to see the performance of Air India for the timing of the IPO. The IPO would come at an appropriate time," Civil Aviation Secretary Ashok Chawla told reporters here.

The public issue of the airline is to come after the complete merger of state-run airlines Air India and Indian, slated to happen by the first half of 2009.

Chawla hoped the current stock market volatility may subside by the time of the launch of the IPO and said the government was not confronted with the question of deferring the IPO.

"There is no question of deferring or not deferring the IPO at the moment," he said.

The merger of the two airlines was initiated in July-August 2007 and the government had indicated a timeframe of 12-18 months for its completion.

There was a proposal to offload 10-15 per cent of government stake in the merged entity for its expansion. It was also expected to give away five per cent of its equity as stock options to the employees of the airline.

Source : The Economic Times

MUMBAI: CRISIL has assigned IPO Grade "4/5" to the proposed issue of UTI Asset Management Company, which indicates that the fundamentals of the issue are above average relative to other listed equity securities in India. But the grade is not an opinion on whether the issue price is appropriate in relation to the issue fundamentals.

The grading reflects UTI AMC's position as one of the leading players in the mutual funds industry. The company has a higher proportion of retail and equity assets under management compared to other players by virtue of its strong retail distribution channel and brand recognition. The retail base helps UTI AMC to better manage the churn of assets, while the higher proportion of equity provides higher recurring management fees as compared to debt funds.

The grading reflects CRISIL's expectation that the management will be able to harness these strengths to mobilise mutual fund assets and register growth to substitute the expected decline in income from the Specified Undertaking of Unit Trust of India.

CRISIL also expects that in spite of being a specialised asset management company, UTI AMC will be able to effectively compete with universal service providers like the ICICI group, the HDFC group and the Reliance (ADAG) group.

UTI AMC aims to raise Rs 23-24 billion from the proposed offer for sale of 48,500,000 equity shares.

Source : The Economic Times

Gammon Infrastructure Projects Ltd has priced its initial public offer at 167 rupees a share, at the lower end of the given price band. At this level, the company, will raise 2.76 billion rupees from the 16.55-million-share offer. The company will use the funds for investment in several projects, repaying debt and for acquisitions.

The listing on the stock exchanges is likely in the first week of April.

Source : GreyMarket Blog

The death of IPO market is an worrying news for the Indian economy. To understand how much Indian corporates depend on IPOs for funds let us look at the IPO collection figures in the last five years. Corporates collected Rs 22,131 crore in 2003-04, Rs 25,526 crore in 2004-05, Rs 23,676 crore in 2005-06, Rs 24,993 in 2006-07 and a whopping Rs 51,408 crore in 2007-08 (till the end of January 2008). In the next financial year, according to earlier estimates, corporates were preparing to raise close to Rs 75,000 crore through IPO.

If the present bearish phase continues, we will see very few IPOs. Naturally, those who were to use IPO money for new projects, expansion and working capital will either postpone their plans or borrow from banks to fulfill commitments. Since bank loans are more expensive and come with end-use conditions, project cost will go up. Many infrastructure projects in the field of power, roads housing complexes may suffer for the want of money and this in turn may hamper industrial development in general.

A slump in stock prices will also considerably contract the purchasing power of such consumers who invested in shares for gain. Slackening property prices in Mumbai and Delhi is a good example and it is no wonder that the realty sector is the worst affected in the present market meltdown.

When will the investment climate improve to bring back IPOs in the market? No one knows for sure. IF US economy goes into a deep and prolonged recession, which now is a distinct possibility, share markets everywhere will remain in the doldrums.

Fortunately, Indian economy is strong enough to withstand many adversities. First of all, the economy is on a sound footing even though the GDP growth is projected slightly lower at 8.7 per cent. Inflation at around 5 per cent is not all that high. The country has a huge foreign exchange reserve and large domestic market makes India fairly insulated from export dependency.

Source : GreyMarket Blog

Gammon Infrastructure Projects Ltd has priced its initial public offer at Rs 167 a share, at the lower end of the given price band, a company official said on Monday. At this level, the company, will raise Rs 276 crore from the 16.55-million-share offer.

The company will use the funds for investment in several projects, repaying debt and for acquisitions. Gammon Infra is 82.5 per cent owned by construction firm Gammon India. Its share offer, which closed on March 13, had been subscribed 3.48 times.

Qualified institutional buyers subscribed five times their alloted quota, high net worth individuals 3.5 times, and retail investors one time. A majority of the bids for the book-built offer had been received at the lower end of the Rs 167-200 price band.

"The listing on the stock exchanges is likely in the first week of April," company secretary Sathis Chandran said. IDFC-SSKI Investment Banking and Macquarie Capital Advisers are the book-running lead managers to the issue.

Source : TET

Speaking at the Euromoney Conference, Sebi chief CB Bhave said that all investors should pay up the entire money if the time duration between an IPO and its listing is reduced. “FIIs have to put up margins, retail investors have to pay 100%, this is related to a time gap between the last day of subscription and the day the securities get listed. If the time is crunched then there’s no reason why everyone cannot pay all upfront,” Bhave explained.

On the P-note registration issue, Bhave said, “Since October end, when this policy was announced, 190 FIIs and 470 sub accounts have registered with us, this is good progress. We take 15 days to three weeks to register FIIs unless the applications are incomplete where some correspondence is needed.”

On private equity funding, he said, “We don’t, in our FII regulations, have any category like private equity funds. There are different entities entitled for registration as FIIs in the Indian market, as long as they fall in one of those categories. We don’t even recognise hedge funds as a separate category.”

On the primary market, Bhave said, “The present process which requires three or four weeks is not acceptable in today's state of modern infra in the country, we want to reduce this. In a few months we will tell the markets what our road map is and how we plan to crunch this time lag between the last date of subscription and listing date. We should be able to achieve this in lesser period of time.”

Source : MoneyControl