securities

MCA to keep itself Away from Sebi-Sahara Dispute

by Paul Joseph June 20, 2011

The Ministry of Corporate Affairs (MCA) washed off its hands from the ongoing dispute between Sebi and Sahara Group companies, which has been restrained by the market regulator from mobilising funds from the public. In a statement, the MCA has clarified that Sahara Prime City intended to go for an IPO and had filed information about its group companies to Sebi in its Draft Red Herring Prospectus. Further, Sebi upon noticing inadequacy in material disclosures had asked information about some Sahara Group companies as per its disclosure requirements. However, the information was not furnished by November 11, 2010, and Sebi passed an interim order issuing show cause to two Sahara Group companies — SIRECL and SHICL — and restraining them from mobilising funds from the public. “This order has been challenged by the said companies and the case is now sub judice before the Hon’ble High Court of Allahabad, Lucknow Bench. As this is a matter between the Sahara Group companies and Sebi, the MCA cannot intervene in the matter,” the MCA said. The MCA added that in order to check misuse of private placement provisions under the Companies Act, 1956, issued a circular dated 22 November, 2010 mandating its field offices to carefully scrutinise offer documents filed by Unlisted Public Companies proposing to raise money through the private placement route. Besides, it is working on to substitute Unlisted Public Companies ( Preferential Allotment) Rules, 2003 by replacing it with Unlisted Public Companies (Preferential Allotment) Rules, 2011, which would require more disclosures and keeping the securities in demat form. Also, it said checks and balances, coupled with stringent penalty provisions have been built into the Companies Bill to prevent misuse.

Tagged as: before-the-hon, delhi, group-companies, gurgaon, offer-documents, public, real estate, sahara, sahara-group, securities

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SEBI Bars Emaar MGF from Raising Rs1600cr via IPO

by Paul Joseph April 29, 2011 Uncategorized

Real estate developer Emaar MGF Land’s third attempt to raise Rs 1,600 crore through an initial share sale offer has hit a regulatory hurdle. Even after seven months, the Securities and Exchange Board of India has not given nod to Emaar MGF for its initial public offering as the New Delhi-based firm’s role came under scanner for alleged irregularities in developing the Commonwealth Games village, according to persons with direct knowledge of the matter. The joint venture between Indian lender MGF and Dubai’s Emaar Properties had filed its draft red herring prospectus (DRHP) with the capital markets regulator on September 30, 2010. The V K Shunglu committee, appointed by the Prime Minister to look into issues relating to organising and conduct of CWG held in Delhi last year, has come down heavily on Emaar MGF Construction Pvt Ltd, a unit of Emaar MGF Land. In its second report released last month, the committee has indicted Emaar MGF for failing to meet its contractual obligations, receiving undue financial gains and making unauthorised payments, among other things. The committee headed by the former Comptroller and Auditor General of India (CAG) estimated the total financial favours/loss to the Delhi Development Authority (DDA) by a series of decision taken to support Emaar MGF to as much as Rs 1,244.50 crore. The committee recommended that the Government of India or DDA may take appropriate action against Emaar MGF for knowingly supplying incorrect information and for its various acts of omission and commission. Separate e-mail queries sent to the spokespersons of Emaar MGF and Sebi on the issue remained unanswered. Among the risk factors in its DRHP Emaar MGF had said concerns regarding the readiness and habitability of the CWG village could expose the company to reputation and financial risk. This is the third time in the last four years that Emaar MGF’s plans to raise money through IPO have hit the wall. Earlier, in February 2008, the real estate developer had to withdraw its IPO due to poor response from investors after the stock market collapse. The company again filed for IPO in September 2009 and received Sebi’s nod in March 2010. However, it did not proceed with the issue at that time and re-filed in September 2010. Besides deferring the issue, Emaar MGF has also significantly scaled down the issue size from Rs 6,400 crore in 2008, to Rs 3,850 crore 2009 and to Rs 1,600 crore in 2010. The IPO is crucial for the company as it plans to repay and prepay debt of Rs 614 crore and redeem preference shares worth Rs 626.9 crore and pay development charges of Rs 83.6 crore out of the issue proceeds. According to the DRHP filed by the company in September 2010, it had a total debt of Rs 4,689 crore as on August 31, 2010. Of which the company had to repay Rs 1,199.8 crore by March 31, 2011, around Rs 796.8 crore and Rs 142.6 crore by March 31, 2012 and March 31, 2013, respectively. In addition, it had Rs 2,383 crore as compulsorily debentures as on August 31, 2010. A spokesperson for Emaar MGF said this month that the company had refinanced some of its debt and had also repaid Rs 1,400 crore in the last year-and-a-half. The company had a net profit of Rs 125 crore on sales of Rs 2,078 crore in FY10.

Tagged as: auditor-general, commonwealth, comptroller, delhi, exchange-board, indian, property prices, real estate developers, real estate india, securities, spokespersons

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Home Loans in India

by Paul Joseph February 28, 2011 Uncategorized

By way of the earnings of middle class people in India escalating quickly, purchasing home has become solitary of the apex priorities for them. As a result, individual can observe structure of residences just about all over the place. These residences are being offered during loans. Home loans in india properties have therefore become predictable for purchasing houses. In India real estate , banks, public sector home financing companies or from monetary institutions are chief source of home loans. Home finance companies permit up to 80-85 % of the residence price. The borrower is necessitated to place a firm % of the loan as down payment. The remaining repayment of them is made during installments that consist of interest on them. But the borrowers should be ready to propose collateral securities to the lender for home loan. These securities comprise assurance form one or two persons, life insurance policies projects, share or unit deposits or any other securities. You must as well know about interest rates. In India properties , both fixed and hanging interest rates are being presented to the borrowers on the fixed rate permits for a fixed payment towards the interest all over the loan period. Hanging price may fluctuate as stated by vacant market interest rate. Be watchful in choosing for a rate continuing your circumstances in mind. In so far as repayment of housing loans is alarmed, there are countless choices accessible to the borrowers on the word of their private situation. The house buyers in India property have conventional EMI repayment process for clearing installments. But this technique may or may not outfit to all borrowers as their situations differ.

Tagged as: securities

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HC Respite for Sahara Real Estate-SEBI asked to File Response

by Paul Joseph December 2, 2010 Uncategorized

Giving respite to the Sahara Group entities, banned by market regulator from accessing public fund, the Allahabad High Court has asked the Securities and Exchange Board of India (Sebi) not to take any “coercive” action against the company and file its response by Saturday. The Lucknow Bench of the Allahabad High Court in its interim order said that the decision on admissibility of the petition and injunction sought by Sahara group firm will be taken after the response from Sebi and Registrar of Companies. The order, passed by a Division Bench comprising Justice Devi Prasad Singh and Justice V K Dixit on the petition filed by the Sahara Real Estate Corporation, asked respondents — Sebi and the Registrar of Companies — to file their responses by December 4 and “till then, no coercive action shall be taken by the respondents”. In its petition filed before the High Court on November 29, the Sahara group firm challenged the order of Sebi restraining two entities and promoters, including Chairman Subrata Roy, from accessing market for non-disclosure of information. The Sahara company has argued that only the central government may pass such an order and not the Sebi. The market regulator, according to the company, had issued the order without providing it an opportunity to put forth its viewpoint. Ahead of moving the court earlier this week, Sahara group had come out with a major advertisement campaign in the national dailies saying it would challenge the November 24 order which was dubbed as “irresponsible” and reflected “malice and bias” on the part of Sebi officials. Apart from banning Sahara India Real Estate Corporation (SIRECA), Sahara Housing Investment Corporation (SHICL) and their promoters — including Roy — from raising money from the public, Sebi said there was a need for lifting the veil on corporate fund raising. It also sent a recommendation to the government for taking appropriate action under the Companies Act. In its campaign the group had said that “Sebi has pushed us against the wall, that is why in the interest, image and goodwill of entire Sahara India Pariwar, we have been forced to come out with all the details… Now we shall soon appeal against Sebi’s action at an appropriate forum. “…Certain individuals occupying their office (Sebi officials) act with malice and biased approach which serve no public good and earn only a bad name.”

Tagged as: chairman, companies, delhi, faridabad, mumbai, property prices, real estate companies, real estate india, securities

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India Shares End Flat; Property Stocks Down After RBI Tightens Lending Rules

by Paul Joseph November 3, 2010 Uncategorized

MUMBAI (Dow Jones)–Indian shares ended flat Tuesday, as the Reserve Bank of India’s indication of a pause in its monetary policy-tightening cycle after raising rates six times this year offset a fall in property stocks on tougher bank lending requirements. The central bank, as was widely expected, Tuesday raised the repurchase rate by 25 basis points to 6.25% and the reverse repurchase rate by 25 basis points to 5.25%. But it said that it sees little need for more increases in the near-term as its tighter monetary policy acts to bring down inflation. The 30-stock Bombay Stock Exchange’s Sensitive Index was flat at 20,345.69 points. It had gained 2.1% in the previous two sessions. The National Stock Exchange’s S&P CNX Nifty ended flat as well, gaining a marginal 1.45 points to 6,119. “The rate hike was on expected lines. It was a rangebound session – with overall investors reluctant to buy ahead of the [U.S. Federal Reserve] meeting and after a more than 300 point rally in the last session,” said Alex Mathew, head of research at Geojit Financial Services Ltd. “I remain positive on the markets due to ample liquidity and expectations of a strong listing by Coal India later this week. I expect the Nifty to trade 6,000-6,300 near-term,” he added. Trading volume on the BSE increased to INR48.83 billion from INR20.22 billion Monday, when trading was halted from 0630 GMT to 0900 GMT due to technical issues. Tuesday, decliners beat gainers 1,596 to 1,386, while 119 stocks were unchanged. The Sensex has risen 13% since Sept. 1 and is up 28% from its May 25 low of 15,960.15. Strong foreign inflows, normal monsoon rains and stable-to-positive global equity markets have helped. Foreign funds have purchased a total $26.25 billion of shares so far in 2010 through Monday, according to the Securities and Exchange Board of India. Property shares ended down Tuesday after the central bank tightened lending rules for housing loans. The RBI imposed a ceiling on the loan-to-value ratio for housing loan exposure, capping it at 80%; increased the risk weight for residential housing loans worth INR7.5 million and more to 125%; and raised the standard asset provisioning by commercial banks for teaser home loans to 2% from 0.4% now. The 13-stock BSE Realty index ended down 2.6% at 3,643.97. DLF fell 3.3% to INR349.10 and Unitech closed 3.3% lower at INR86.25. Reliance Industries–India’s largest listed company by market value–fell 1.7% to INR1,074.35 on profit-taking. Auto shares also ended lower on profit-booking as concerns rose that higher interest rates could slow down sales. Mahindra fell 1.1% to INR757.15 and Tata Motors declined 1.4% to INR1,153.90. Engineering and construction major Larsen & Toubro rose 2.5% to INR2,133.25 on hopes of increased order inflows in the second half of this year. Cement maker ACC ended up 4.2% at INR1,056.95 after it reported a 14% rise in cement sales in October. By Gurdev Singh Virk, Dow Jones Newswires; 91 22 6145 6119; Gurdev.Singh@dowjones.com

Tagged as: securities, year

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Will it be third time luck for Emaar MGF IPO?

by Paul Joseph October 15, 2010 Uncategorized

Despite the market turning positive for real estate stocks, with two developers hitting the primary market since last week, analysts are noncommittal over the proposed initial public offering (IPO) by Delhi-based real estate company Emaar MGF Land Ltd. According to analysts, the success of the proposed IPO depends on the performance of that of Prestige Estates Projects Ltd – which opened on Tuesday – and the market sentiments in the coming two months, when the Emaar MGF issue is likely to hit the market. Last week, Mumbai-based Oberoi Realty Ltd managed to have a smooth sail with its Rs 1,000-crore issue being oversubscribed 12 times due to the active participation of institutional investors and high net worth individuals, though interest from retail investors remained subdued. On Tuesday, Bangalore-based Prestige Estates Projects launched its Rs 1,200-crore IPO that closes on October 14. In a pre-issue placement, Prestige Estates allotted shares to several anchor investors at Rs 183 per share aggregating Rs 215 crore. Initial response for the issue from institutional investors seems positive, though the final outcome would be known only on Thursday. Experts maintain that this would set the tone for the Emaar MGF IPO. The company had submitted a fresh draft prospectus with the market regulator last week to raise Rs 1,600 crore after having to back out twice earlier. “Emaar MGF is an unfortunate victim of negative market sentiments. It has tried to enter the market twice before. I think it was only bad timing that affected the company. Let us see what happens this time,” said Alex Mathews, head of research at Geojit BNP Paribas. “They (Emaar MGF) have been talking about the IPO and unless they launch, it would be improper to speculate and comment,” said Shobhit Agarwal, joint managing director of the capital markets division at Jones Lang LaSalle Meghraj. “Like DLF and Unitech, Emaar MGF is a national player and is completely different from Oberoi Realty and Prestige Estates which are Mumbai and Bangalore stories respectively,” Agarwal said, adding: “All eyes are now on the Coal India IPO that would determine the future course of the market and decide the fate of other realty IPOs that are in the pipeline.” The Coal India IPO is slated to be the country’s biggest new share sale. Emaar MGF, a joint venture between Dubai’s Emaar Properties PJSC and MGF Development Ltd of India, has been trying since 2007 to tap the capital market. In 2007, it had planned an IPO to raise Rs 7,000 crore but had to withdraw after the market turned choppy. The same was true last year, when the firm backed down again, despite bringing down the issue size. Though the regulator, the Securities and Exchange Board of India, is yet to give its nod to the Emaar MGF issue as it would take a month for evaluation, the company is hopeful given the improved market sentiment. “Our capital requirement has reduced because several of our projects that were launched have helped us generate cash. Our debt burden has also come down,” said a company official, justifying the smaller sized issue. The official did not want to be identified. The company’s debt obligations have come down to Rs 4,689 crore compared with Rs 6,000 crore earlier. It is mainly banking on its land reserves of 11,365 acres which can be monetised by developing prime real estate.

Tagged as: dubai, emaar mgf, india, issue, securities, time

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Real Estate Developer Kalpataru to raise Rs 1,000-cr via IPO

by Paul Joseph September 27, 2010 Uncategorized

Realty firm Kalpataru has joined the bandwagon of property developers that are planning to cash in the rising stock market and has filed the draft papers with the market regulator Sebi for the Rs 1,008-crore initial public offer. Kalpataru, the flagship real estate company of the Kalpataru Group, has filed the draft red herring prospectus with the Securities and Exchange Board of India, merchant banking sources told media. The Mumbai-based realtor would be raising Rs 1,008 crore through its initial public offering, sources said. The company is considering to raise about Rs 200 crore as pre-IPO placement, a source said. The entity may offer some discount to retail investors and its employees over the IPO issue price, he said. The IPO is based on a 100 per cent book building process. Kalpataru is the latest entity in realty sector that is approaching capital market to meet its money requirement. A host of property developers such as infra major HCC-promoted Lavasa Corporation, Oberoi Realty and Sahara Prime City are in queue to enter the market. Recently DB Realty and Godrej Properties hit the primary market. “Indian stock market is upbeat and no one wants to miss the opportunity. A host of companies are lined up to come out with their public issues,” an investment banker said. Kalpataru is focused on development of premium residential, commercial, retail, integrated townships and redevelopment projects primarily in Mumbai and Pune. It has also undertaking projects in other cities such as Hyderabad, Surat, Nagpur, Jaipur and Udaipur. Kalpataru Group has interests in real estate development, property and project management, engineering, procurement and construction contracting for the power transmission and infra projects. Morgan Stanley, Citigroup Global Markets India, Collins Stewart Inga, ICICI Securities, IDFC Capital Ltd and Nomura Financial Advisory and Securities India are managing the IPO.

Tagged as: delhi, india, markets, morgan-stanley, real estate, real estate developers, real estate india, securities, stock-market

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Azure to Invest in Mumbai Re-Development Projects

by Paul Joseph September 20, 2010 Uncategorized

Azure Capital Advisors, a Bangalore-based venture capital firm, has launched a new realty fund which would invest in Mumbai re-development projects and other mid-sized real estate projects in the country. Speaking to Business Standard, Deepak Kumar, investment officer, Azure Capital Advisors, said that the company has floated ‘India Realty Fund I’, which is registered as a venture capital fund with the Securities and Exchange Board of India (Sebi). “We have raised Rs 80-90 crore from our own network and will raise another Rs 110-120 crore by September 30,” he said, adding that the fund’s focus would be on the re-development projects in Mumbai, mid-size residential projects in south India, Gujarat and Maharashtra. Launched by professionals who were earlier with Aditya Birla group, IDFC, Infosys and other companies, the company plans to raise Rs 500 crore by the end of this year. Among others, it has Chandrashekhar Prabhu, former president of Maharashtra Housing and Area Development Authority (MHADA) and chairman of the advisory committee of the department of housing in Maharashtra government. Kumar said that his firm expects to conclude 10-15 deals through this fund with housing societies in Mumbai. The company has identified Chembur, Andheri and two more locations in the city. “We will offer finance and would bring in eco-system partners including construction companies, architects, investors and buyers to the table, while the societies would bring in land bank,” said Kumar. “Redevelopment projects give good returns and have less risk and competition since the process is complex and needs more expertise.” The company plans to focus on cities which house corporates operating in the knowledge sector. The cities on Azure’s radar include Chennai, Coimbatore, Bangalore, Surat and Ahmedabad. “We will tie-up with corporate houses, who in turn will give incentive for performing employees, by which the employees will save around 10-15 per cent of the total property cost,” said Kumar. “Our focus is on projects which can come up in 4-10 acres, primarily small/mid-size deals with limited project risk and an investment of Rs 10-25 crore,” Kumar said.

Tagged as: bangalore, bangalore-based, companies, real estate, real estate india, real estate trends, securities

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Real estate developer Ashoka Buildcon Sets Price Band of 297-324 Rs Share for its 2.25 bn IPO

by Paul Joseph September 20, 2010 Uncategorized

Real estate developer Ashoka Buildcon has set a price band of 297-324 rupees a share for its 2.25 billion rupees initial public offer (IPO), a newspaper advertisement said on Monday. The subscriptions to the IPO will begin on Sept 24 and close on Sept 28, it said. Enam Securities and IDFC Capital are the lead managers to the offer while Motilal Oswal Investment Advisors is the co-lead manager.

Tagged as: billion-rupees, investment, property prices, real estate india, securities

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Embassy Property Developments Ltd in Talks with Temasek and HDFC Property Ventures for Private Equity Placement

by Paul Joseph August 10, 2010

Southern real estate major Embassy Property Developments Ltd is holding talks with Singapore’s Temasek and HDFC Property Ventures for private equity placement topping $100 million even as the Bangalore headquartered developer is working on an initial public offer (IPO) in 2011. Temasek could be co-investing with HDFC Property Ventures, which has made three large project level investments with Embassy in the past. Temasek is an investor in the $800-million HDFC fund and has the option of investing along with it, VCCircle has reported, citing banking sources. Jitendra Virwani-led Embassy filed for an ambitious Rs 2,400 crore (or $520 million) IPO with the Securities Exchange Board of India (SEBI) last month, and appointed investment banks UBS, Citigroup, Nomura and Edelweiss for the public issue that most probably will hit the market next year. The firm has developed over 24 million sq ft of real estate (including the share of joint development partners and others) and manage economic interests from a substantial part of what it owns (rather than opting for outright sale). The portfolio is skewed towards large business parks (like the 6.12 million sq ft Embassy Golf Links) and SEZs even though residential, retail and hospitality verticals are now beginning to fill up the revenue streams.

Tagged as: bangalore, banking and finance, property prices, real estate developers, real estate india, securities

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