Sunday, September 17, 2006

Idea IPO likely early next year

The Aditya Birla group is learnt to be considering the option of an initial public offer to sell part of its stake in its telecom business — Idea Cellular — by early next year.

But the group is also not averse to the idea of a pre-IPO placement to gain from the current interest in the telecom sector, chairman Kumar Mangalam Birla told ET.

Idea Cellular, was originally a JV between the Tatas and the Birlas, before the latter bought out the Tatas’ 48% stake for Rs 4,406 crore. After the deal with the Tatas, the Birlas indicated that they were looking at selling Aditya Birla Nuvo’s stake of 33% in Idea.

“We are talking to other private equity groups including Providence for selling the (Aditya Birla) Nuvo stake...since the due-diligence is on, it’ll take some time,” Mr Birla said recently.

The Birlas own 98.3% in Idea, with Aditya Birla Nuvo holding 35.7%, Birla TMT Holdings 44.9%, Grasim 7.5%, and Hindalco 10.1%. However, officials indicated that the group is exploring options of an IPO where about 20% of the Birlas’ equity can be sold. The move comes on the back of a revival in the capital market and strong prospects for the telecom sector.

According to analysts, a public float would help Idea get money for expansion and increase visibility. “There is healthy appetite for telecom paper in the market because Bharti Airtel and Reliance Communications are the only other major telecom service providers that are listed,” said an analyst with a Mumbai-based brokerage. State-owned MTNL, VSNL and Tata Teleservices (Maharashtra) are the other listed companies.

Idea has a net worth of Rs 1,042.92 crore, as per a document submitted by the company to the department of telecom (DoT). Going by the valuation of the Tatas’ 48.14% stake at Rs 4,406 crore, the total value of the company could be pegged at Rs 9,152 crore, or Rs 40.50 per share. Analysts however estimate the valuation to be in the range of Rs 20,000 crore to Rs 25,000 crore.

Group officials said another supporting reason for an IPO is the scope for growth.

Fiem Industries Ltd (IPO)


Fiem Industries Ltd.-a ISO 9000 / TS 16949 certified company is a reputed manufacturer of quality automotive components. It has been its objectives to make these quality items available to its customer at a competitive price. This approach has helped its growth from small manufacturing unit. The company is setting up an export-oriented unit in Hosur, Tamil Nadu, with technical support agreement with Ichikoh Industries Ltd, Japan, for automotive lamps, rear view mirrors, wiper blade assemblies and signalling equipment. Ichikoh's clients include Nissan, Toyota, Honda, Suzuki and others.

Automobile Parts, Components & Spares, Automotive Lighting, Head Lamp, Tail Lamp, Warning Triangle, Reflector, Auxillary Light, Fog Light, Automotive Lamp, Blinker Lamp, Reflex Reflector, Work Lamp.

Public issue of 41,00,000 equity shares of face value of Rs. 10 each of Fiem Industries Limited. It is planning to raise funds to meet its expansion plans.The company has filed draft red herring prospectus (DRHP) with SEBI for a 100% book building process. IL&FS Investments Ltd is the book running lead manager for the issue.The issue comprises of a reservation for eligible employees of 4,00,000 equity shares of Rs.10 each and a net issue to the public of 37,00,000 equity shares of Rs. 10 each. The issue will constitute 34.58% of the total post issue paid-up equity capital of our company. Price band: Rs.125 to Rs.145 per equity share of Rs. 10 each. The issue price is 12.5 times the face value at the lower end of the price band and 14.5 times the face value at the higher end of the price band. The issuue is from Sep 21, 2006 to Sep 27, 2006.