Hindustan Media gets subdued response on second day

The IPO received just 1.83 lakh bids from the total reserved quota of 1.38 crore shares on offer

Hindustan Media Ventures (HMVL), the publisher of Hindi daily ‘Hindustan’ has received a dismal response for its initial public offer (IPO) on day two of the issue.

The retail quota received bids for 1.78 lakh shares from the total 49.79 lakh shares on offer. The response from the non-institutional investor category was poorer. The NII category received only 5,720 bids from the total reserved quota of 16.59 lakh shares. Similarly, qualified institutional buyers (QIBs) have steered clear from bidding. This category has 71.81 lakh shares on offer. The QIB quota received zero subscription.

Overall, the issue has been subscribed 0.01 times as on 6 July 2010. The IPO closes on 7 July 2010. HMVL has set the price band at Rs162-Rs175 per share and plans to raise Rs270 crore through this issue.

HMVL raised Rs46.10 crore by issuing 22.77 lakh shares to seven anchor investors at Rs166 per share on 2 July 2010.


Around 1.5% of RInfra’s customers shift to Tata Power

Around 45,000 (or more than 1.5%) of RInfra’s Mumbai suburban customers have shifted to Tata Power over the last nine months. The load being shifted is being estimated to be as high as 150MW to 200MW. On the other hand, RInfra has witnessed a net addition of 70,000 customers over the past one year

Since October 2009, when Tata Power Company (TPC) was allowed to supply electricity to Reliance Infrastructure’s (RInfra’s) existing customers, around 45,000 or more than 1.5% of RInfra customers have shifted to TPC. Despite this shift, RInfra has witnessed a net addition of 70,000 customers during the past one year.

On 15 October 2009, the Maharashtra Electricity Regulatory Commission (MERC) had passed an interim order stating that TPC would be allowed to supply power to existing RInfra customers who wished to switch their power utilities.

Around 45,000 RInfra customers have switched over to TPC, according to official data released by RInfra. However, the company also states that it has added around 1.15 lakh new customers over the past one year. Thus, the utility has witnessed a net addition of 70,000 customers, excluding the switchovers to TPC. Out of this total 1.15 lakh customers, around 91,860 are residential; 23,345 are commercial and 389 are industrial customers. RInfra has added 60,000 consumers since the MERC order.   

“The number of customers who have shifted from RInfra to TPC could amount to a load shift of around 150MW to 200MW,” said an ex-employee of RInfra, requesting anonymity. Officials from RInfra also told Moneylife that this quantum of load shift is the correct figure.

According to official figures released by RInfra, as of 24th June, during the year under review, there was an addition of over 1,00,000 consumers. During this year, there was a shift of around 30,000 consumers to TPC out of the total consumer base of over 27.3 lakh. This shift amounts to around 1.1% of RInfra’s total customer base up to March 2010.

Last year in December 2009, Moneylife had reported that around 1,500 customers had switched over to TPC from RInfra within a period of two months (see: two companies have been locked in a bitter row for over two years on power supply to Mumbai’s suburbs. This fight further intensified with TPC being allowed to supply power to RInfra’s existing customers.

There has been regular reporting on campaigns driven by both camps against each other. In the most recent attempt, RInfra was accused of distributing booklets to its consumers (see: that claimed that TPC is planning to make Rs1,200 crore at the cost of Mumbai consumers by diverting the electricity produced for the city to areas outside the metropolis. In turn, TPC stated that RInfra is trying to restrain its consumers from switching over to Tata Power.


India Inc raises Rs40,500 crore via bonds in April-May

Companies are in need of capital and since the equity market is under pressure, they are raising money through bonds

Volatility in the equity market is making Indian companies go for the debt route to raise funds, as the companies raised a whopping Rs40,500 crore through private placement of bonds in the first two months of the current fiscal, a 43% jump over the year-ago period, reports PTI.

The companies, which are listed on the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE), have garnered Rs40,488.45 crore in April-May, 2010, through issuing 251 such bonds. Listed companies had raised Rs28,239 crore through issue of bonds in the same period last year, according to the data available with market regulator Securities and Exchange Board of India (SEBI).

"The fund raising activity among the companies is picking up as the markets are recovering from its last year lows. But, the equity markets are trading under pressure. The companies are in need of capital and bonds being a more secured options, they are raising money through these routes," SMC Capitals equity head Jagannadham Thunuguntla said.

Corporate bonds are long-term debt instruments issued by private companies to raise funds for expansion of business.

The firms have raised Rs16,514.18 crore through issuing 139 such bonds in April and the growth trend continued in May also with companies raising Rs23,974.27 crore through issuing 112 bonds.

In all, there were 251 issuance of privately placed corporate bonds during April-May, up from 123 in the same period of previous fiscal.

The BSE benchmark Sensex, during the period under review, fell by 583.14 points, or 3.32%, to settle at 16,944.63 points on May 31.

During the calendar year till May, the listed companies have raised a staggering Rs1.14 lakh crore by 681 bond issues, against Rs 91,772.46 crore through 390 bond issues during the same year-ago period.

Companies had raised over Rs2.12 lakh crore through corporate bonds in FY'10 compared to Rs1.73 lakh crore raised through corporate bonds during 2008-09.


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