Investment banks in hiring mode
Abhineet Kumar / Mumbai October 10, 2009, 0:56 IST
Demand zooms for expertise in equity, infrastructure & telecom.
Till a few months ago, hiring was a strict no-no for investment banks. On the contrary, they were scaling back staffing plans in India given the dearth of merger and acquisition activity and stagnant capital markets.
That is changing rapidly with a rising number of deals fuelled by strong growth in the markets and an improving economic environment.
As a result, the talent hunt has been resumed, especially for people with expertise in equity markets, infrastructure and telecom. For instance, Citi Global Markets recently hired Bhavna Thakur as head of transactions, capital markets, from Morgan Stanley. Merrill Lynch has selectively started hiring for mid-level positions and Goldman Sachs is recruiting at associate and senior associate levels.
Japan's financial powerhouse, Nomura, which bought 35 per cent in LIC Mutual Fund in July, already employs over 2,600 people in India. It surprised many by issuing half-page advertisements expressing its intent to recruit in large numbers. Many banks have moved to reallocate senior staff from other regions to India.
Apart from the global banks, domestic firms such as Edelweiss filled four positions at vice-president and senior vice-president levels. Yes Bank filled one vice-president position this month.
“The hiring has started very selectively,” confirmed Aditya Sanghi, co-founder and managing director investment banking at Yes Bank.
“Further recruitment may take place with M&A activity gaining momentum,” he added.
“Investment banks have started building their teams in expectation of the deal market picking up," says Ranu Vohra, managing director, Avendus Advisor, a home-grown investment bank.
Avendus has been hiring throughout the year for its new functions such as equity research, but it recently recruited a senior person in the equity markets side and is filling up a leadership-level position for its M&A advisory this month.
Saket Jain, managing partner at Vito India, a specialised head hunting firm for the industry, says investment banks are currently looking for mid- to senior-level executives especially for infrastructure, telecom and financial institution groups.
Indian companies raised about Rs 13,000 crore through initial public offers in the June-September period this year, including those from Adani Power, Oil India and NHPC.
Merchant bankers are expecting over Rs 50,000 crore to be raised in the second half of the current financial year. This has created a lot of demand for the equity capital market function for which Citi hired the transaction head.
The tempo of hiring is expected to pick up from January. Global banks follow the calendar year and top-level hiring for various vertical heads are expected to take off in the January-March period.
http://www.business-standard.com/india/news/investment-banks-in-hiring-mode/372817/
Saturday, October 10, 2009
Tuesday, October 6, 2009
It's the festive season for initial offers, too
It's the festive season for initial offers, too
Abhineet Kumar / Mumbai October 6, 2009, 0:16 IST
September saw 30 companies file prospectuses
The mad rush of 2006 may still be a distant memory, but India Inc is trying hard to make up for lost time as far as raising money from the capital market is concerned.
Last month saw 30 companies filing their draft red herring prospectuses (DRHPs) with the market regulator for initial public offers (IPOs), a sharp increase from six in August and three in July this year. The Securities and Exchange Board of India received eight filings in September last year, the month the Lehman Brothers meltdown brought the world economy to its knees.
Prime Database Managing Director Prithvi Haldea says this year, the September rush is even greater than earlier years because companies are returning to the primary market after a year’s gap.
Enam Securities alone has filed DRHPs on behalf of 10 companies in the last two weeks of September this year. Pankaj Jaju, senior vice-president at Enam Securities, said, “There was almost no activity till June. With the Sensex moving up sharply, there has been a clubbing of DRHPs by all those who have been waiting in the wings for a long time.”
Real estate and infrastructure companies lead the list with nine IPO applications.
These were from companies such as Emmar MGF Land (over Rs 3,500 crore), Sahara Prime City and Lodha Developers. Telecommunication infrastructure provider Reliance InfraTel has announced plans to raise Rs 5,000 crore from the primary markets.
“Overall IPO activity is good now. We can also expect a rush in December,” said Anil Ladha, head, capital markets, ICICI Securities.
Indian companies raised about Rs 13,000 crore through initial public offers in the June- to-September period of this year, including those from Adani Power, Oil India and NHPC. Merchant bankers are expecting over Rs 50,000 crore to be raised in the second half of the current financial year.
Power companies such as GMR Energy, Indiabulls Power and JSW Energy are expected to lead the charge along with public sector companies such as Bharat Heavy Electricals and NTPC.
A Prime Database study found that public sector companies benefit a great deal when they are listed on the stock markets. Four of them — Power Finance Corporation, Power Grid Corporation, Rural Electrification Corporation and NTPC — made valuation gains of up to four times after they were listed.
There are, however, some worry signals. For example, most of the IPOs so far received enthusiastic response, but the stocks’ performance has been lacklustre after listing.
Several of these are trading at a discount to the issue price, raising concerns over whether the issues were priced right.
The encouraging response to the Oil India listing has, however, removed some of those uncertainties.
http://www.business-standard.com/india/news/it/sfestive-season-for-initial-offers-too/372327/
Abhineet Kumar / Mumbai October 6, 2009, 0:16 IST
September saw 30 companies file prospectuses
The mad rush of 2006 may still be a distant memory, but India Inc is trying hard to make up for lost time as far as raising money from the capital market is concerned.
Last month saw 30 companies filing their draft red herring prospectuses (DRHPs) with the market regulator for initial public offers (IPOs), a sharp increase from six in August and three in July this year. The Securities and Exchange Board of India received eight filings in September last year, the month the Lehman Brothers meltdown brought the world economy to its knees.
Prime Database Managing Director Prithvi Haldea says this year, the September rush is even greater than earlier years because companies are returning to the primary market after a year’s gap.
Enam Securities alone has filed DRHPs on behalf of 10 companies in the last two weeks of September this year. Pankaj Jaju, senior vice-president at Enam Securities, said, “There was almost no activity till June. With the Sensex moving up sharply, there has been a clubbing of DRHPs by all those who have been waiting in the wings for a long time.”
Real estate and infrastructure companies lead the list with nine IPO applications.
These were from companies such as Emmar MGF Land (over Rs 3,500 crore), Sahara Prime City and Lodha Developers. Telecommunication infrastructure provider Reliance InfraTel has announced plans to raise Rs 5,000 crore from the primary markets.
“Overall IPO activity is good now. We can also expect a rush in December,” said Anil Ladha, head, capital markets, ICICI Securities.
Indian companies raised about Rs 13,000 crore through initial public offers in the June- to-September period of this year, including those from Adani Power, Oil India and NHPC. Merchant bankers are expecting over Rs 50,000 crore to be raised in the second half of the current financial year.
Power companies such as GMR Energy, Indiabulls Power and JSW Energy are expected to lead the charge along with public sector companies such as Bharat Heavy Electricals and NTPC.
A Prime Database study found that public sector companies benefit a great deal when they are listed on the stock markets. Four of them — Power Finance Corporation, Power Grid Corporation, Rural Electrification Corporation and NTPC — made valuation gains of up to four times after they were listed.
There are, however, some worry signals. For example, most of the IPOs so far received enthusiastic response, but the stocks’ performance has been lacklustre after listing.
Several of these are trading at a discount to the issue price, raising concerns over whether the issues were priced right.
The encouraging response to the Oil India listing has, however, removed some of those uncertainties.
http://www.business-standard.com/india/news/it/sfestive-season-for-initial-offers-too/372327/
Monday, October 5, 2009
UltraTech's plan for FPO
UltraTech plans public offer to fund expansion
Abhineet Kumar & Chandan Kishore Kant / Mumbai October 4, 2009, 0:51 IST
UltraTech is planning a follow-on public offer to fund the expansion of its cement business. The fund-raising exercise is likely once the restructuring of the business, announced today, is over.
The company has an investment plan of Rs 15,000 crore over the next five years to add about 25 million tonnes of capacity.
“The idea of the restructuring is to create a platform which will help in raising funds through a follow on public offer,” said D Muthukumaran, head (group corporate finance), AV Birla Group. “Grasim can bring down its holding to 51 per cent in the follow-on public offer. But it will take time.”
The cement business of the group is currently valued at a discount of 10 to 15 per cent to its peers such as ACC and Ambuja, which are owned by Holcim of Switzerland, because of the risks related to Grasim’s other businesses such as viscose staple fibre.
“Once the cement business comes under one entity, we will bridge the gap in valuation,” said Raj Balakrishnan, MD (M&A), DSP Merrill Lynch.
http://www.business-standard.com/india/news/ultratech-plans-public-offer-to-fund-expansion/372135/
Abhineet Kumar & Chandan Kishore Kant / Mumbai October 4, 2009, 0:51 IST
UltraTech is planning a follow-on public offer to fund the expansion of its cement business. The fund-raising exercise is likely once the restructuring of the business, announced today, is over.
The company has an investment plan of Rs 15,000 crore over the next five years to add about 25 million tonnes of capacity.
“The idea of the restructuring is to create a platform which will help in raising funds through a follow on public offer,” said D Muthukumaran, head (group corporate finance), AV Birla Group. “Grasim can bring down its holding to 51 per cent in the follow-on public offer. But it will take time.”
The cement business of the group is currently valued at a discount of 10 to 15 per cent to its peers such as ACC and Ambuja, which are owned by Holcim of Switzerland, because of the risks related to Grasim’s other businesses such as viscose staple fibre.
“Once the cement business comes under one entity, we will bridge the gap in valuation,” said Raj Balakrishnan, MD (M&A), DSP Merrill Lynch.
http://www.business-standard.com/india/news/ultratech-plans-public-offer-to-fund-expansion/372135/
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