Temasek, LIC put in bids of $ 2 bln each in ICICI Bank FPO; SBI puts in bid of $ 1.35 bln, Warburg Pincus of $ 993 mln

According to sources, Citi & Merrill Lynch P-notes, Temasek and LIC have put in US $ 2 billion worth of bid each. India's largest bank, SBI has put in US $ 1.35 billion worth of bid and Warburg Pincus worth of USD 993 million. All investment via P-notes came in at Rs 950 per share, while top FIIs invested in the issue at Rs 940 per share.

As per the latest news, ICICI Bank FPO was subscribed 10.53 times, QIB portion 20 times.

The bank could raise over Rs 9,000 crore from the issue, if it sells the shares towards the higher end of the price band of Rs 885-950 a share. This is part of the company's plans to raise as much as five billion dollars from the issue of equity shares in domestic market and American Depository Receipts in the US. The issue, which opened on June 19 and was fully subscribed soon after the bidding began, is scheduled to close today.

Goldman Sachs Group Inc and Merrill Lynch & Co are managing the sale of the shares locally and abroad. Enam Financial Consultants and JM Financial Consultants are helping with the local sale.


Gati Corporation flares up with huge volumes; Co expects to post more than Rs 690 Cr sales for FY 08

Gati Corp has touched an intra day high of Rs 103.60 and an intra day low of Rs 90.60. Currently, the share is quoting at Rs 98.70, up Rs 8.70, or 9.67%. It is trading with volumes of 662,290 shares, compared to its 5-day average of 192,496 shares, an increase of 244.05%.

Gati has capex plans of Rs 450 crore over 3 years. 70-75% of investment will be in the warehouse & shipping business. The company had recently entered into agreement with Indian Airlines for Wet Lease agreement for Freighter Aircrafts for 5 years. The aircrafts induction will be in July, Sept, Oct, Nov 2007 & January 2008.

Mahendra Agarwal, MD of Gati says that the company is expecting a good growth almost around 30% topline and the same at the bottomline. A leading brokerage thinks that they can do about Rs 690 crore in terms of sales for FY08 and probably Rs 912 for FY09. The company says that they will be doing much better than that. "The budget that we finalized last week shows that the growth would be much higher than what we had predicted earlier," Agarwal says.

The company had announced that Gati is going to add 1 billion sq.ft of warehouse space across the country and last week they inaugurated the biggest and the first mechantronic express distribution center in Bangalore. It can take about 7,000 pallet and has a space of about 250,000 sq.ft. As per their plan, 18 of these mechantronic express distribution centres are going to come all across the country and biggest one is going to come in at Nagpur.

"As far as money is concerned we have already raised the money through private equity fund, through FCCB and promoters also pitching in through convertible warrants, we also have cash surplus coming out of operation. So put together the US$ 100 million required for investment has already been arranged," Agarwal says.

In the next two-year they are going to take their market share to 13-14%.

Speaking on the prospects of the stock, investment advisor S P Tulsian says, "The best part, which I like about Gati, is its professional management and the consistency, which they have been reporting for past couple of years and whatever call which the analysts have been taking the company has probably surpassed them.Even for FY07 ending June 30th, I am expecting an EPS of close to Rs 4 and the best part is the cash EPS is about Rs 5.50 and since 30% of growth on topline and bottomline is expected probably one could stretch it beyond Rs 5.50 also for FY08."

So if you see the logistic industry a lot needs to happen on the air cargo front but because of lack of infrastructure the things are not picking up, but once we have the private airports and other facilities have been developed mainly at Mumbai, Delhi, Bangalore and Hyderabad even Bangalore, Hyderabad airports will be on by 1st April 2008, that would really be a kicker and I think that company will stand to gain or take a market share substantially of the air cargo, Tulsian adds.

GATI is the largest express distribution company and provides integrated logistics services, offering end-to-end multimodal solutions through air, rail, surface and sea.


Mkt at fair levels, major collapses unlikely, support level at 14000: Deutsche Bank

Marshall Gittler, Chief Asian Strategist, Deutsche Bank, said that currently he is neutral on India and concerns are for short term only. The concerns are regarding higher interest rates, firm rupee and less liquidity. He was of the view that higher interest rate environment could hit earnings growth, but he opined that RBI is likely to be on hold for some time now regarding interest rate growth. He quoted that he is expecting one rate cut by The Fed this year.

He said that liquidity is drying up in India on large issues and bond investments. On Global scene, he said that the liquidity situation on global front is still quite benign.

Commenting on Indian market, he said that it is currently at fair levels and that major collapses in the market are unlikely. He is seeing the support level to the market at 14000. He further said that there is still a high appetite for emerging market equities. Given growth, markets are not expensive and emerging market growth story is firm, he opined.


Finolex Industries to sell Pune land to Tishman Speyer for Rs 300 Cr, deal works out to Rs 24/shr

Finolex Industries is close to inking a pact with Tishman Speyer India Ventures, a company engaged in real estate development, for the sale of its land in Chinchwad, near Pune, which currently houses one of its PVC pipe manufacturing facility. The deal is expected to be worth over Rs 300 crore. The deal works out to be Rs 24 per share at market price of Rs 83.65 per share.

To pave the way for the impending agreement, the PVC pipe manufacturing plant that currently stands on the 78-acre plot will be moved to the company's existing plant at Ratnagiri. Finolex Industries is also adding capacity by setting up another Greenfield facility to manufacture pipes at Urse. It may be recalled that the Pune-based Finolex Industries had announced that it would develop an IT SEZ on the property. However, with the new developments, Tishman Speyer India Ventures will develop the land, and, in the process `unlock value' for the company.

Finolex Industries will move its Chinchwad plant, lock, stock and barrel to its 1000-acre plot in Ratnagiri where it is already producing nearly 60,000 tonne of pipes annually, in addition to PVC resin.

A second Greenfield plant is also being put up Urse, where the company has procured a 20-acre plot of land recently adjacent to the Finolex Cables plant. Work on the new plant is already under way. It is expected to go on stream by December, and produce 20,000 tonne of pipes annually.

Tishman Speyer Properties, a leading owner, developer and operator in the real estate sector has developed properties across the world including New York icons Chrysler Building and the Rockefeller Centre. Tishman Speyer India Ventures is a 50:50 joint venture between Tishman Speyer Properties USA and ICICI Ventures.


Mumbai HC says gas available for only NTPC, RNRL, RIL could lose up to $ 4 Bn, DSP ML quantifies worst case impact of Rs 26/shr

The Bombay High Court has said that Reliance Industries cannot sell the gas to be produced from one of its prime blocks in the Krishna-Godavari basin to any third party other than Anil Ambani’s Reliance Natural Resources (RNRL) and NTPC. In an interim order on a petition filed by RNRL, the high court has said that the 81.6 million cubic metres of gas per day (mmscmd) is to be earmarked for RNRL, NTPC or for RIL’s captive use for the next eight years.

But the Central Government is likely to challenge the decision in the Supreme Court. “The government is the owner of the gas blocks and all hydrocarbon assets belong to the government. RIL in this case is only an operator and RNRL or NTPC potential bulk consumers. We cannot allow the gas to lie idle at a time when we are paying heavily to meet our energy requirements,” an official said.

The order is significant for several reasons. It means that RIL, which had called for competitive tender last week for selling the gas to power and fertiliser companies, cannot proceed with its plans. The bids had generated a price of $ 4.58 per mmbtu that is nearly double the price at which RIL had originally agreed to sell to RNRL and NTPC. According to calculations, RIL could lose up to $ 4 billion if it is forced to sell the entire quantity at a lower price.

The Union Ministry of Petroleum and Natural Gas, which has till now played the role of an adjudicator in the RIL vs RNRL case, may soon enter the fray, this time as a respondent. Senior Petroleum Ministry officials indicated that the government is likely to soon move the Supreme Court against the Bombay High Court order in a bid to make gas available for power and fertiliser companies.

The High Court order also impacts the government’s position. The government earns a part of the revenue from sale of gas as profit petroleum. Any delay in sales will hit government’s earnings. The genesis of the dispute can be traced back to the agreement between the Ambani brothers in June 2005 to carve out the Reliance business empire between themselves.

According to the family settlement, RIL agreed to supply 28 mmscmd of gas to Reliance Energy at $ 2.34 per mmbtu. It also agreed to sell the 12 mmscmd of gas earmarked for NTPC if its agreement with the power major collapsed. RIL and NTPC were arguing over their deal at that time with NTPC accusing the Mukesh Ambani company of going back on its word to sell 12 mmscmd at a stipulated price.

DSP ML has said that the High Court ruling on D6 gas would have worst case impact of Rs 26/share. The ML report states that RIL recently discovered a 'market determined price' for D6 gas by inviting tenders
from 5 power and 5 fertilizer producers. This price is linked to oil and would be US $ 4-4.7/mmbtu at Brent price of US $ 26-65/bbl. "At our Brent price forecast, the gas price would be at the ceiling of US $ 4.7/mmbtu. Our view is that even now only 40mmscmd of gas may have to be sold by RIL to NTPC and RNRL at a price of US $ 2.8/mmbtu. The balance gas even if sold to these entities would be at a market determined price," the report states.

Thus RIL's average price on 80mmscmd of gas may still be US $ 3.75/mmbtu, which is just 6% below US $ 4/mmbtu assumed by us in our D6 gas valuation. In this scenario downside to our D6 gas valuation of Rs 304/share would be just Rs 26/share. If entire gas has to be sold at US $ 2.8/mmbtu downside to valuation would be Rs 113/share. However there is nothing to suggest this is the case, the report adds.