Plan BSNL IPO price at Rs 300-400/sh: A Raja

The Telecom Minister, A Raja has requested the BSNL Trade Unions to have healthy discussions on the impending BSNL IPO. Raja said that the listing would be beneficial for the State-owned BSNL. He assured that BSNL employees to be given shares in the IPO. Each BSNL employee would get 500 shares at Rs 10 each, listed at Rs 300-400 per share.
There is no time-frame fixed for the BSNL IPO, Raja said.

Nu Tek India Limited IPO

Incorporated in 1993, Nu Tek India Limited is a Telecom infrastructure service provider, offering Infrastructure rollout solutions for both mobile and fixed telecommunication networks. Nu Tek offer services to Telecommunication Equipment Manufacturers, Telecom operators as well as third party infrastructure leasing companies in installing and maintaining Telecom Network Equipment & Infrastructure.

Nu Tek undertake turnkey projects, provide management expertise to their clients for infrastructure creation and installation for telecom sites which includes Passive Infrastructure like Towers, Telecom Shelters, Backup Power - DG sets and Battery Banks, Electrical Infrastructure and Earthing Stations etc. and active infrastructure like Base Transceiver Station (BTS), microwave, optic fibre, Base Station Controller (BSC), Mobile Switching Centres (MSC), IN (Intelligent networks), VAS (Value added services) equipments, transmission equipment such as STM’s and Microwaves to the most advanced World Interoperability for Microwave Access (WIMAX) equipment and future ready 3G Nodes. Company also provide technical support services in the High End Telecom segments such as Radio Frequency and Transmission Planning, Network Tuning & Optimization and Quality of Service (QoS) to their clients.

Major clients amongst Telecom Equipment Manufacturers are:

1. Nokia Siemens Networks Pvt Ltd
2. Ericsson India Pvt Ltd
3. Motorola India Pvt Ltd
4. Nortel Networks India Pvt Ltd

Major clients amongst Telceom Operators are:

1. Tata Teleservices Ltd
2. Reliance Communications Ltd
3. Bharti Airtel Ltd
4. Idea Cellular Ltd
5. Vodafone Essar Ltd(Hutch)
6. Videsh Sanchar Nigam Ltd

Major clients amongst third party infrastructure leasing companies are:

1. Quipo Telecom Infrastructure Ltd
2. Essar TTIL Ltd
3. Xcel Telecom Ltd
4. IMI Ltd

Objects of the Issue:

The objects of the Issue are to achieve the benefits of listing on the Stock Exchanges & to raise capital for:
Capital Expenditure;
Overseas Acquisitions;
Augmenting Long Term Working Capital requirement;
General Corporate Purposes;
Expenses related to Fresh Issue.

Nu Tek India Ltd IPO Information

Public Issue Open: July 29, 2008 to August 01, 2008

Public Issue Type: 100% Book Built Issue (Initial Public Offer IPO)

»» Public Issue Size: 45,00,000 Equity Shares of Rs. 10/-

»» Face Value: Rs. 10/-

»» Public Issue Price: Rs 170/- to Rs 192/-

»» Market Lot: 30 Shares

»» Minimum Order Quantity: 30 Shares

»» Maximum Subscription Amount for Retail Investor: Rs 100,000/-

»» Listing: BSE, NSE

»» Lead Manager: Spa Merchant Bankers Ltd, India Infoline Ltd
»» Registrar: Aarthi Consultants Pvt Ltd (Ph: +91-40-27638111 Email: info@aarthiconsultants.com)

KSK Energy Ventures IPO receives 1.50 times subscription

The Initial Public Offering (IPO) of KSK Energy Ventures Limited which opened for subscription on Jun 23, 2008 has received subscription of 1.50 times till 5:30 PM on June 25, 2008.The company has come out with an IPO of 3,46,11,000 EQUITY SHARES of Rs 10 each for cash at a price band of RS.240 TO RS.255 through 100% book-building process.The issue has received subscription of 1.50 times till 5:30 PM on June 25, 2008.The issue has received bids for 52069675 equity shares against the offer of 34611000 equity shares. The issue has received bids for 2103825 shares at cut-off price.The Qualified Institutional Buyers (QIBs) portion of the issue has received bids for 6002575 equity shares against the offer of 20766600 shares resulting in a subscription of 2.2152 times.The Non Institutional Investors portion of the issue has received subscription of 1.0885 times with bids for 3767250 equity shares against the offer of 3461100 shares.The Retail Individual Investors (RIIs) portion of the issue has received bids for 2299850 equity shares against the offer of 10383300 equity shares resulting in a subscription of 0.2215 times.The issue closed for subscription on June 25, 2008.

KSK Energy Ventures IPO receives 1.09 times subscription

The Initial Public Offering (IPO) of KSK Energy Ventures Limited opened for subscription by investors on Jun 23, 2008. The company has come out with an IPO of 3,46,11,000 EQUITY SHARES of Rs 10 each for cash at a price band of RS.240 TO RS.255 through 100% book-building process.Kotak Mahindra Capital Company Limited, IDFC-SSKI Private Limited, Morgan Stanley India Company Private Limited, Lehman Brothers Securities Private Limited and Edelweiss Capital Limited are the Book Running Lead Managers to the issue.Axis Bank Limited is the Co-Book Running Lead Manager to the issue.Kotak Securities Limited, Sharekhan Limited and Edelweiss Securities Limited are the Syndicate Members to the issue.Karvy Computershare Private Limited is the Registrar to the issue.The issue has received subscription of 1.09 times till 4:00 PM on June 24, 2008.The issue has received bids for 37736925 equity shares against the offer of 34611000 equity shares. The issue has received bids for 34650 shares at cut-off price.The issue closes for subscription on June 25, 2008.

L&T 3 IPOs for 2009-10

Engineering and construction major Larsen & Toubro plans to go ahead with the first of the three proposed initial public offering of its group companies in 2009-10.
The company, which has a wide portfolio of operations ranging from manufacturing to software services, intends to tap the capital market for its information technology arm L&T Infotech, L&T Infrastructure Development Projects and its financial services business.
“It’s most likely that the first of the three to get listed will be our information technology arm,” Mr A.M. Naik, Chairman and Managing Director of the company, told press persons on Thursday. He said that the IT arm will get listed in 2009-10, depending on market conditions, and that there would be an IPO every year for the other two companies.
The company, meanwhile, is gearing up to expand its business canvas by getting into power production and coal mining, in expectation of a strong growth in the power sector for the next 10 years. Although coal mining will not constitute a full-fledged business, L&T plans to take up mining operations to feed its proposed power plants.
Shipbuilding plans
L&T is also betting big on shipbuilding, with plans to set up a Rs 2,000-crore integrated greenfield shipbuilding yard at Ennore, north of Chennai. “We have appointed an international consultant from Germany to advice us on the type of vessels that would be built at the shipyard. We are scheduled to have a meeting with them (the consultants) next week,” Mr Naik said. He expected the shipyard to start making ships from 2011.
He did not specify the type of ships that the company proposed to build at the shipyard, but made it clear that the yard would not make the conventional bulk carriers or tankers. The yard will instead focus on specialised vessels of above 1.5 lakh DWT.
The company currently operates a small shipbuilding yard at Hazira in Gujarat, with the current order book position being Rs 1,300 crore. “We are not taking fresh orders for the time being due to capacity constraints,” he said.
Capex programme
Mr Naik said the company has lined up a capital expenditure programme of about Rs 2,000 crore to expand its various facilities in the current fiscal.
The company plans to sharpen focus on its operations in West Asia and Gulf, as “there is scope for doing more there.” Also, its overseas operations would provide the company an opportunity for better risk management in the event of an economic slowdown in specific geographies.
The international order book position for its engineering and construction business stands at Rs 8,210 crore, accounting for about 16 per cent of the segment’s order book, which was in the region of Rs 50,931 crore as on March 31, 2008.
In the real estate sector, L&T is in the process of concluding agreements with two real estate developers to undertake construction projects. “Both the projects will involve an investment of over Rs 5,000 crore to be executed in five years,” Mr Naik said. The company has already concluded similar agreements with the Hiranandani and Oberoi groups, reports The Hindu Business Line.

Multi Commodity Exchange of India Ltd (MCX) IPO

Incorporated in 2002, Multi Commodity Exchange of India Limited (MCX) is an independent and de-mutulised multi commodity exchange. MCX has permanent recognition from the Government of India for facilitating online trading, clearing and settlement operations for commodities futures market across the country. ISO 9001:2000 certified MCX is amongst the world's top three bullion exchanges and top four energy exchanges.
MCX offers trading in futures contracts based on 55 commodities from various market segments including bullion, energy, ferrous and non-ferrous metals, oils and oil seeds, cereals, pulses, plantations, spices, plastics and fibers. In the top ten commodity derivatives exchanges in the world, MCX is the largest silver exchange, the second largest natural gas exchange, the third largest gold exchange, the third largest crude oil exchange and the third largest copper exchange in terms of the number of contracts traded for each of these commodities for the period from January 1, 2007 to December 31, 2007.
Headquarter of MCX is in the financial capital of India, Mumbai and the average daily turnover of MCX is around USD 1.55 bn (Rs.7,000 Crore April 2006), with a record peak turnover of USD 3.98 bn (Rs.17,987 crore) on April 20, 2006. In the first calendar quarter of 2006, MCX holds more than 55% market share of the total trading volume of all the domestic commodity exchanges. MCX is the first commodity futures exchange in India to offer trading in steel futures, and the first in India to launch futures trading in crude oil.
Key shareholders of MCX are Financial Technologies (I) Ltd., State Bank of India and it's associates, National Bank for Agriculture and Rural Development (NABARD), National Stock Exchange of India Ltd. (NSE), Fid Fund (Mauritius) Ltd. - an affiliate of Fidelity International, Corporation Bank, Union Bank of India, Canara Bank, Bank of India, Bank of Baroda, HDFC Bank, SBI Life Insurance Co. Ltd., Merrill Lynch and Citigroup.

Objects of the Issue:
The objects of the Issue are to achieve the benefits of listing on the Stock Exchanges & to raise capital to:
Expansion and Enhancement of the information technology infrastructure of the Exchange;
Setting up of the Commodity Ecosystem Infrastructure;
Equity investment in clearing corporation set up by MCX;
Strategic investments and acquisitions;
To meet expenses of the Issue in order to achieve the benefits of listing on the Stock Exchanges;

General corporate purposes.

CRISIL assigns IPO grade 5/5 to MCX

CRISIL has come out with a research report on Multi-Commodity Exchange of India's IPO. It has assigned a CRISIL IPO Grade 5/5 to the company's IPO. The company proposes an IPO in the form of an offer for sale of 4 million shares by the promoters and a fresh issue of 6 million shares. Subsequent to the IPO, the promoters' stake in the company will reduce to 26.1 per cent.

ICICI Securities IPO based on market condition: Kamath

NEW DELHI: ICICI Bank will come out with a public offer for its investment banking arm I-Sec based on market condition, CEO of the largest private sector bank K V Kamath said.

"We will look at it (IPO of ICICI Securities) based on market condition," said Kamath.

At present, there is no particular hurry to list the shares of the company, he said.

In January the board of ICICI Securities approved the initial public offer and private placement of shares to one or more institutional investors.

Soon after the decision, ICICI Bank Joint Managing Director and CFO Chanda Kochhar had said, the shares of ICICI Securities will be listed on the bourses in about six months.

The board had decided to offload 15 per cent of its shares to retail or institutional investors. ICICI Securities having an equity capital of Rs 61 crore is a major player in retail broking and has posted revenues of Rs 527 crore during the first nine months of the current fiscal while profits were at Rs 108 crore in the same period.

Talking about Cash Reserve Ratio hike, Kamath said, "there is going to be profitability impact on banks, that I think is given because whatever is kept aside as CRR, you are not going to get interest on it."

But, whether the banks are going to absorb the hit on profitability or pass it on to customers by raising interest rates is a decision that each bank would take in due course, he said.

"Let's absorb it and understand what the impact is and what the market directions are. You can always increase interest rates but there has to be demand for credit," he added.

Biocon to sell up to 25% in Syngene via IPO

BANGALORE: Biocon will launch an IPO for its fully-owned contract research subsidiary Syngene this financial year, it said on Tuesday.

Details of the planned IPO has not been finalised, Biocon chairman & MD Kiran Mazumdar Shaw said, but senior officials who declined to be identified said it could be a combination of Biocon selling 20%-25% of its holding in Syngene as well as an issue of fresh shares.

Biocon earned Rs 176 crore from contract research in the fiscal-ended March 2008, an increase of 29% over the previous year.

“We believe that there is enormous scope for growth of Syngene given that global pharma companies are looking at reducing their costs and the market for generics is on the rise,” Ms Shaw said.

Visa Raises $17.9 Billion in Biggest U.S. IPO, Prices Shares at $44 Each

March 18 (Bloomberg) -- Visa Inc., the largest payment-card network, set a record for U.S. initial public offerings today by raising $17.9 billion, more than expected.
Underwriters sold 406 million shares of San Francisco-based Visa for $44 each, above the expected range of $37 to $42 each, according to Bloomberg data. That values the entire company at $42.5 billion, compared with $27.6 billion at rival MasterCard Inc., the industry's second-largest company. The stock begins New York Stock Exchange trading tomorrow under the ticker ``V.''
Chief Executive Officer Joseph Saunders pressed ahead with the sale amid the worst market for IPOs since 2001. Demand for new shares has waned this year, with 133 companies raising $16 billion as of yesterday, 47 percent less than in the same period last year, according to data compiled by Bloomberg.
Visa's IPO ``is in a league of its own,'' said Francis Gaskins, president of Gaskins IPO Desktop, in an interview with Bloomberg Television. ``It's a one of a kind and it shows that the IPO market is not dead.''
The IPO eclipses AT&T Wireless Group's $10.6 billion stock offering in 2000 and ranks second in the world after the $22 billion debut in 2006 of Industrial & Commercial Bank of China Ltd.
Visa and MasterCard have benefited as consumers pay for more purchases with credit and debit cards instead of cash. Cards will be used for 55 percent of all U.S. transactions by 2011, rising from 40 percent in 2005, according to the Nilson Report, an industry newsletter based in Carpinteria, California.
Visa's profit doubled to $424 million in the quarter ended Dec. 31. Revenue surged 76 percent to $1.49 billion.
Visa and MasterCard, which is based in Purchase, New York, are insulated from rising defaults and late payments because, unlike American Express Co. and Discover Financial Services, they don't extend credit to cardholders. Banks that issue the cards take the credit risk.
The Visa share sale was managed by JPMorgan Chase & Co. and Goldman Sachs Group Inc. with assistance from 13 firms including Bank of America Corp. and Citigroup Inc.

20 Microns files IPO papers with SEBI

MUMBAI: 20 Microns Ltd has filed a draft red herring prospectus with the Securities and Exchange Board of India for an initial public offering of 94,25,632 equity shares of Rs 10 each at a price to be decided through the book-building process. Of the IPO, the company has reserved 4,71,282 shares for employees. The issue will constitute 49.10 per cent of the post issue paid up capital. The issue comprises a net issue to public of 67,50,000 shares of Rs 10 each and an offer for sale of 26,75,632 shares by Gujarat Venture Capital Fund 1995. The shares will be listed on Bombay Stock Exchange and National Stock Exchange. The company is into micronised minerals and a trend setter in the usage of ultrafine minerals ranging from 20 microns to 2 microns particle size for paints & plastic industries. 20 Microns has introduced minerals of sub micron size and helped all the industrial segments in terms of functional properties. The company popularised the concept of finer calcium carbonate and other minerals fillers and innovated a good substitute for paint & plastic industries. Usage of grades of finer particle in the range of 20 microns and finer grades for calcium carbonate / talc / kaolin / dolomite and mica is very common now for various industrial segments. The book running lead manager is Keynote Corporate Services.

FIIs should pay full amount upfront, if time gap in IPO cut

MUMBAI: Market regulator SEBI on Monday said like retail investors, FIIs should also pay the full amount of IPOs upfront, if its idea of reducing the time gap between the last day of subscription and the listing of the scrip is implemented.

"FIIs have to put up margins, retail investors have to pay 100 per cent. 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 is no reason why everyone cannot pay all upfront," SEBI Chairman C B Bhave said at a Euromoney Conference.

The market regulator said the present process that requires three or four weeks is not acceptable in today's state of modern infrastructure in the country.

"We want to reduce this. In a few months, we will tell the markets what our roadmap 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," he said.

On the issue of Participatory Notes, he said 190 FIIs and 470 sub-accounts have registered with SEBI since October end last year when liberal registration policy was announced.

"This is a good progress. We take 15 days to three weeks to register FIIs unless the applications are incomplete (and) where some correspondence is needed," he said.

Bhave said SEBI did not recognise hedge funds and private equity funds as separate categories.

Twenty IPOs hit SEBI clarification hurdle

MUMBAI: Market regulator SEBI has sought "clarifications" on proposed initial public offers of as many as 20 companies, including the likes of leading commodity bourse MCX, Mahindra Holidays, Oil India and Anil Ambani group's telecom tower business arm Reliance Infratel. Besides, at least 21 other IPOs are currently awaiting the clearance from Securities and Exchange Board of India, which includes 15 offers whose bankers have replied with clarifications sought from them. While some bankers said that responses to the SEBI are being delayed deliberately in some of the cases in view of the turbulent market conditions prevailing on the bourses, those associated with some of these deals said these are "routine" clarifications and would be responded in the due course. According to the latest processing status as on March 14 of draft offer documents filed with SEBI, clarifications are currently awaited from lead managers in relation to 20 IPOs. Out of these firms, the notice has been issued over the MCX IPO recently, while the clarifications are awaited on IPOs like Reliance Infratel, Oil India Ltd, Mahindra Holidays & Resorts (MHRIL) and National Hydroelectric Power Corporation (NHPC) for more than at least two weeks. Other such IPOs include Jaiprakash Power Ventures, PNC Infratech, Pipavav Shipyard and Sea TV Network. As per the existing guidelines, SEBI may issue its observations, which are necessary for the IPOs to proceed, on a draft offer document filed with it within 30 days from the date of receipt. However, it may seek any additional information or clarification in relation to the draft offer documents from the merchant bankers and issue its observations within 15 days from the date of receipt of satisfactory reply.

Titagarh Wagons IPO to open on March 24

MUMBAI: Private sector railway wagon manufacturer, Titagarh Wagon is entering the capital market with its initial public offering of 23,83,768 shares of Rs 10 for cash at a price to be determined through 100 per cent book building process. The issue opens on March 24 and closes March 27. The price band has been fixed between Rs 540 and Rs 610 per share.

The issue comprises fresh issue of 20,68,111 shares and an offer for sale of 3,15,657 equity shares by Rashmi Chowdhary and Strategic Ventures Fund (Mauritius). The issue consists of a net issue of 23,68,768 shares and a reservation of up to 15,000 shares for subscription by eligible employees. The net issue will constitute 12.8 per cent of the post issue capital of the company.

At least 60 per cent of the net issue will be allocated on a proportionate basis to qualified institutional buyer, 5 per cent of the QIB portion will be allocated to mutual funds, and the remaining will be allocated to the QIB bidders including mutual funds. Further, not less than 10 per cent of the net issue will be allocated on a proportionate basis to non-institutional bidders and 30 per cent to retail investors.

The company plans to utilise the proceeds for - a) Setting up an EMU manufacturing facility at Uttarpara unit, b) Modernising and expanding the existing facilities at Titagarh and Uttarpara units, c) Setting up an axle machining and wheelset assembly facility at Uttarpara unit, d) Constructing a corporate office and a design cum research and development office, e) Strategic acquisition or investments, f) Brand building exercise and g) General corporate purposes.

Titagarh Wagons operates two manufacturing facilities located at Titagarh and Uttarpara, in West Bengal. As an “Industry Partner” to the Defence Research and Development Organisation, Ministry of Defence, the company manufactures special purpose wagons, shelters and other engineering equipments.

The company also manufactures and markets special purpose wagons to suit the varying needs of its customers, such as the Merry-Go-Round wagons, special wagons for the Indian Defence establishment. The company has acquired the heavy engineering division of Hyderabad Industries which includes a manufacturing unit at Uttarpara, West Bengal with a steel foundry, fabrication cum machining facility and access to a rail siding.

The order book of the company stands at Rs 753.11 crore with the rolling stock division constituting nearly Rs 669.39 crore as on January 31, 2008. The company is structured along three broad business lines: a) wagon manufacturing division, b) special projects division (includes defence, bailey bridges and other fabricated equipment) and c) heavy earth moving and mining equipment division.

Since fiscal 2003, the company’s total income and profit before tax have grown from Rs 47.17 crore and Rs 4.71 crore respectively to Rs 284.05 crore and Rs 44.80 crore respectively in fiscal 2007, which represents a CAGR of 57 per cent and 76 per cent respectively, during this period. The wagon dispatches of the company have increased from 644 wagons in fiscal 2003 to 2,073 wagons in fiscal 2007.

The stock will be listed on the Bombay Stock Exchange and National Stock Exchange of India.

The lead manager to the issue is Kotak Mahindra Capital and the co-book running lead manager is JM Financial Consultants.

Biocon plans IPO of research unit by Mar 2009

India's top biotechnology firm, Biocon, is looking at overseas acquisitions for about USD 10 million to boost its sales globally and gain access to innovative drugs, its chairman said on Wednesday.
Biocon, which makes insulin, cholesterol-lowering statins and other branded drugs, had earlier this month agreed to buy 70 percent of German marketing firm AxiCorp GmbH for 30 million euros (USD 45 million) to boost distribution and marketing of pharmaceuticals in Europe.
"I am looking at smaller companies where even if I have to invest and get a majority or controlling stake it won't cost me more than USD 10 million or thereabouts," Kiran Mazumdar-Shaw said in an interview.
The targets are marketing firms in Europe and research-focused biotechnology companies in the United States, Australia and New Zealand, she said.
Last month, Biocon said its quarterly profit rose more than five times after one-off gains from sale of its enzymes unit to Denmark's Novozymes, and forecast more growth despite recession concerns in its key U.S. market.
Bangalore-based Biocon has been looking to acquire firms to boost its marketing and drug discovery muscles, after it sold off its enzymes business in July last year for USD 115 million.
"For Europe, it's a totally marketing strategy that we are looking at," said Mazumdar-Shaw, who set up Biocon in her garage in Bangalore in 1978. "At the same time we are also looking at acquisition opportunities in say innovation."
She said a plan to launch an initial public offer of its contract research unit, Syngene, was on track by the end of the fiscal year that begins in April. The company has not yet finalised details of the offer.
A 12 percent drop in the stock market this year, caused by a global equities rout, knocked out a few IPOs in the Indian market in recent weeks, including a USD 1.6 billion issue from Emaar MGF Land, the Indian unit of Dubai's Emaar Properties.
Oral Insulin
Clinical trials for Biocon's innovative oral insulin is making good progress and the company should be able to sign a licensing deal to launch the product in global markets early next year, Mazumdar-Shaw said.
Brokerage ICICI Securities said in a Feb. 19 research report that Biocon might generate "windfall revenue" through the licensing of oral insulin. It has assumed the deal size to be between USD 100 million and USD 300 million.
"We believe we are actually in a very good position because you can see that number of recent diabetic drugs have had safety concerns associated with them," the Biocon chief said.
"That's why we believe an oral insulin could have a very, very interesting opportunity in managing diabetes very effectively with no safety concerns."
Biocon sees prices of statins, which contributes a quarter of its revenue, stabilising on waning competition. The United States and Europe are its main markets for the statins used to lower cholesterol levels.
Investment on research and development activities in the year to March 2009 will be 15-20 percent higher than this year's spending of over 1 billion rupees, said Mazumdar-Shaw, who earned a master's brewing degree in Australia before pioneering Biocon.
Shares in Biocon, which has a market value of more than USD 1 billion, ended 0.3 percent higher at 441.05 rupees on Wednesday in a Mumbai market that edged up 0.1 percent. The stock is down about 24 percent so far this year, reports Reuters.

MCX to enter global league with IPO

Commodity exchanges have come of age. Mumbai-based MCX’s decision to file for an IPO marks India’s entry into an exclusive global club of listed exchanges, whose members include biggies like the Chicago Mercantile Exchange, the Chicago Board of Trade and Euronext-Liffe and Bursa (Malaysia). As exchanges guard street credibility with their lives, opening themselves up for even more stringent public scrutiny only adds to trader trust. Though MCX is already a demutualised exchange, it will now be opening itself to even more regulation by getting listed. MCX will be regulated both, by the Forward Markets Commission, which is the commodity trading regulator, and Sebi, which keeps an eye on India’s 10,000 listed companies. Once the MCX IPO is through, the exchange would be listed on both, the NSE and the BSE. But even though the NSE has a 2% stake in the company, it is unlikely to create any conflicts of interest between its roles as shareholder and regulator of MCX. Experts say the matter has been investigated and settled more than 20 years ago. “The Kania committee in India, which included renowned names like justices MH Kania, M N Chandurkar and YH Malegam deliberated on these issues and that it would be desirable for a demutualised stock exchange to list its shares on itself or on any other stock exchange,” said an observer. More importantly, as the seventh largest exchange in the world, NSE itself has sufficient credibility and effective regulatory mechanisms in place to deal with such potential conflicts. “When NYSE, LSE and NASDAQ can be self-listed and be trusted by their regulator to manage a conflict situation of 100%, we see no reason why the same cannot be replicated in India as well,” he added. Companies that promoted NSE and on its board of directors are also listed on it. NSE had had no problems till now in regulating them as it does any other company. “There is no reason to believe that any information sent by MCX to NSE and BSE will be released to the public only by the BSE and not by the NSE due to conflict of interest. After all, the promoters of NSE are already being regulated by NSE for the last 10 years,” said an industry observer. Getting listed is also unlikely to create any conflict of interest within MCX itself. While it will continue to act as regulator of the trading on its platform, it will simultaneously further shareholder value by improving business prospects. “When MCX is listed on the NSE and the BSE, they will only regulate MCX only as a company for its financial performance as per the listing agreement. The NSE and the BSE will have nothing to do with the trading on MCX,” said an analyst here. “If MCX as a corporate has gone in for voluntarily listing, then it displays its readiness for greater scrutiny and compliance, which could have easily been avoided by just avoiding listing,” he added.

25% public holding may drive out IPOs

Indian primary market is likely to witness a huge flow of public issues if the government's proposal for listed companies to maintain a minimum public holding of 25 per cent is implemented, Assocham has said. "Implementation of the proposed changes in the Act will lead to a huge flow of IPOs and Follow-on offers by a large number of companies into the primary markets," Assocham President Venugopal Dhoot said. The Assocham Eco Pulse study has revealed that only two companies among Sensex and Nifty scrips satisfy the proposed criteria of 25 per cent of 'public' shareholding namely Bajaj Auto and Larsen & Toubro, which have a public shareholding of 27.7 per cent and 35.5 per cent respectively.

The average individuals' holding in Public Sector firms is 1.81 per cent, while the same in private sector is 13.56 per cent, the chamber said. The Finance Ministry had early this month proposed to maintain a minimum public holding of 25 per cent, from the existing 10 per cent, in all listed companies to reduce the scope of price manipulation on bourses. The proposed guidelines assume significance as many companies are just diluting about 10 per cent of their stake through public offers at a high premium. An analysis of Nifty and Sensex companies done by the Chamber has found out that while 94 per cent of the companies satisfy the minimum 25 per cent of non-promoter share criteria along with holdings of qualified institutional bodies, a few meet the public quota as proposed by the Finance Ministry. The study also pointed out that FIIs occupy the maximum share of non-promoter holdings, between 60-40 per cent, followed by insurance companies 20-5 per cent and between 3-1 per cent by the mutual funds. Among the Sensex firms, the average retail shareholding estimated by Assocham was at 11.89 per cent while it was 10.08 per cent among the Nifty companies. If the proposal is implemented in one go, public sector companies such as BHEL with the least percentage of public shareholding of 0.37 per cent, ONGC (1.99 per cent), NTPC (2.03 per cent) and SBI (2.86 per cent) would have to shed their promoters stake, the study revealed. Among the private sector companies, Bharti Airtel with the least percentage of individual shareholding would have to dilute 23.65 per cent of its promoter's stake. While for Maruti Suzuki and TCS, it is 2.46 per cent and 5.34 per cent respectively. The study also found that promoters of the company own over 70-80 per cent stake in most of the energy, IT and telecom companies like TCS (77.78 per cent), Wipro (79.50 per cent), Reliance Petroleum (75.38 per cent), ONGC (74.14 per cent) and NTPC (89.50 per cent).