Govt mulls 10% stake sale in BHEL

Govt mulls 10% stake sale in BHEL

NEW DELHI: The government on Friday said it is considering offloading 10 per cent of its equity stake in navratna public sector unit BHEL. "The point of disinvestment (in BHEL) is still under consideration... the government has definitely a positive thinking on that line," Minister of Heavy Industries and Public Enterprises Vilasrao Deshmukh said when asked whether the government is considering divesting 10 per cent in the company. Addressing his first conference after taking charge as the Cabinet Minister, Deshmukh said his department would back the disinvestment policies of the government. BHEL is a power equipment Rs 28,000 crore listed company. Its stock is trading at Rs 2,060.10 on the Bombay Stock Exchange. The government, if it chooses to further disinvest its stake in the company, will have to come with a follow-on public offer. The government at present holds a 67.72 per cent equity stake in power equipment maker BHEL, which would come down to 57.72 per cent if it divests 10 per cent equity. Minister of Heavy Industries and Public Enterprises Vilasrao Deshmukh while announcing the 100-day agenda for its department said that BHEL would enter into an agreement with Indian Railways for supply of stainless steel EMU coaches on a long term basis. BHEL would synchronise eight thermal and hydro sets to generate 1,200 MW capacity in the next 100 days, he said. He said, BHEL would sign an agreement with Madhya Pradesh Power Generation Company for setting up a joint venture to build,own and operate 2x800 MW super critical power plant in Bansagar in the state and also sign a similar agreement with Gujarat State Electricity Generation Co for the setting-up of a 1x800 MW supercritical thermal power plant. The company would synchronise five captive power plants totalling 228 MW of capacity as a part of its 100-day agenda.

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Mahindra Holidays fixes IPO price band at Rs 275-325/sh

Mahindra Holidays fixes IPO price band at Rs 275-325/sh

Mahindra Holidays and Resorts India (MHRIL), one of the leading leisure hospitality providers in India offering quality family holidays and a part of Mahindra Group, is entering the capital market with an initial public offering of 92,65,275 equity shares of Rs 10 each for cash at a price to be decided through a 100% book-building process.

The bid/ issue will open on June 23, 2009, and close on June 26, 2009. The IPO price band is fixed at Rs 275-325 per share. The size of the issue will be Rs 301 crore at the upper end of the price band and Rs 255 crore at the lower end of the band. M&M (Mahindra and Mahindra) will raise Rs 90.7-123 crore from the sale of 33 lakh shares and it will hold 83% of the Mahindra Holidays post issue.

The issue has been assigned 4 out of 5 IPO grading by Fitch Ratings India Private Limited reflecting 'above average fundamentals’ of the issue relative to other listed equity securities.

The issue comprises a fresh issue of 58,96,084 equity shares and an offer for sale of 33,69,191 equity shares by Mahindra and Mahindra (the “selling shareholder”). The issue would constitute 11.0% of the fully diluted post-issue paid-up capital of the company.

The proceeds from MHRIL’s proposed issue are expected to be deployed in the setting up of new projects and expansion of some of the existing resorts, to provide a larger range of resorts, and hence a wider choice of holiday destinations to members.

Mr Arun Kumar Nanda, Chairman, MHRIL, said, "It is a proud moment that the Mahindra & Mahindra Group’s leisure hospitality and vacation ownership company with an integrated business model is poised to tap the capital markets. The business of MHRIL has been supported by changing demographics, strong economic growth and increasing disposable incomes in India over the last three years. We believe MHRIL’s brands, inventory, distribution of resorts and its integrated model, combined with the company being an early mover in the industry, will give it significant competitive advantage.”

The global coordinator and book running lead manager (BRLM) is Kotak Mahindra Capital Company Limited. HSBC Securities & Capital Markets (India) Private Limited and SBI Capital Markets are the BRLMs. The equity shares are proposed to be listed on the National Stock Exchange of India Limited and the Bombay Stock Exchange Limited.

MHRIL, one of the leading players in the leisure hospitality industry, offers quality family holidays primarily through vacation ownership memberships. MHRIL’s flagship brand is Club Mahindra Holidays, which has been selected as Superbrand 2009. MHRIL has also introduced new vacation ownership offerings such as Zest and Club Mahindra Fundays, Mahindra Homestays, travel and holiday related services through clubmahindra.travel. The cumulative member base increased to 92,825 in fiscal 2009 from 38,691 in fiscal 2006. As of May 31, 2009, MHRIL has 96,067 members and 27 resorts across India and Thailand. About 35.18% of new member additions in FY09 came from referrals by existing members.

Mahindra Holidays had initially filed offer documents in December 2007 but did not proceed due to unfavourable market conditions. The company refiled its draft offer documents with SEBI on 30 September 2008.

It had sold a 2% stake to SBI and 1% stake to Jacob Ballas as pre-IPO placement at Rs 478/share in January 2008. It raised Rs 120 crore through a 3% sale.

Its reported FY09 sales were at Rs 400 crore and profit was at Rs 80 crore.

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Source: Moneycontrol.com