Chillin' out till it needs to be funded
The Divestment fever is catching again with Investment Bankers again ready to underwrite Billions in Equity paper from government owned entities as the brakes were taken off by the securities regulator. SEBI had earlier in the week posited that PSUs do not need to be owned ( Free float for trading ) by public to 25% for listing. Even private companies will be listed below the 25% cutoff and can over a period of 3 years reach the desired end state. PSEs have to issue 10% to the public and even that may likely be exempted for trading behemoths like MMTC. MMTC though is planning a $3 billion float to follow Coal India’s $2.8 billion IPO covered yesterday.
The Exploration and Production major ONGC and the Natural Gas specialist GAIL will also be divesting $3 billion and $1.6 billion in the next 45 days. This has been a great day for Indian public enterprise news and as SBI reports tomorrow to close out the results season, challenges to the topline have been unable to dent India’s momentum even as China gets to a finite 3% inflation rate and brakes. The Capital markets are holding new levels albeit waiting for such news of an uplifting nature that can bring larger demand back to absorb the new $25 billion each corporations that are offering new equity. Institutional Investors will carry most stakes home apart from the underwriters as anchor investors, QIP buyers including LIC with a $20 billion investment corpus, Deutsche Bank and J P Morgan, omni-present in each mandate
The India infrastructure story
The Infrastructure majors with public and banking sector ownership like IDFC and power finance companies PFC, REC or utilities and transcos PTC and Power Grid will also be issuing infra bonds domestically and with the new Infrastructure NBFC qualification get to disbursing larger volumes from current asset base of $7 billion(Rs`28800 Crores) and $2.5 billion (Rs`12000 Crores) for IDFC and PFC for example. Both together are likely to end 2011 with more than $15billion in assets.