PE cos mopped up $17 billion through IPOs in Apr-Jun: E&Y

 “Emerging markets exchanges are becoming increasingly amenable to sponsored IPOs as investors become more comfortable with the PE model,” E&Y global private equity leader Jeffrey Bunder said

Private equity-backed companies mopped up a whopping $17.2 billion through initial public offers (IPOs) globally during April-June, 2011, with firms in Indian and China together accounting $2.7 billion of the total capital raised, says an Ernst & Young report.

According to the report, 45 PE-backed companies raised $17.2 billion in proceeds, highest quarterly total since the second quarter of 2007. This quarter figures are nearly twice the volume of January-March period of 2011 and up 24% on a value basis.

So far this year, PE-backed firms raked in $31.1 billion in 68 separate IPOs, the report said adding that it will exceed the $58.3 billion mark which was raised at the market-peak in 2007.

"Despite ongoing uncertainties in the markets, momentum is clearly continuing to build across the IPO markets. This is giving PE sponsors an ever-widening window to exit holdings as investors move further out of the risk spectrum in search of companies with strong growth stories," E&Y global private equity leader Jeffrey Bunder said.

Companies based in China and India garnered $2.7 billion across nine deals in the second quarter, compared to the $1.5 billion raised in six deals in the previous quarter.

Further, companies based in the emerging markets also continued to see elevated activity as they raised $7.7 billion across 17 separate deals.

"Emerging markets exchanges are becoming increasingly amenable to sponsored IPOs as investors become more comfortable with the PE model. Additionally, the growing availability of cross-border listings is providing emerging markets -based companies with a wider range of opportunities than in past cycles, " Bunder added.

In Asia, IPO activity on Asian exchanges grew from six deals valued at $1.3 billion in first quarter to 12 deals valued at $3.2 billion in the second quarter.

Despite the increase however, issuance came under pressure midway through the quarter as investors dealt with growing concerns about the effects of looming inflationary pressures on the region's economy, leading many companies in Asia-Pacific to postpone or cancel their offerings. China in particular saw 28 deals postponed or withdrawn in Q2.

"While market sentiment could slow the pace of new issuance out of China, the overall pipeline remains healthy," the report noted.


Patni Q2 net income plunges 93% on foreign exchange loss

“We expect our results to stabilise in 2012, after all the integration expenses and the accounting charges related to the acquisition (of Patni by US-based iGate) have evened out,” Patni CEO and MD Phaneesh Murthy said

New Delhi: IT firm iGate Patni today reported a decline of nearly 93% in net income to Rs10.80 crore for the second quarter ended 30 June 2011 compared to Rs147 crore for the April-June quarter of 2010. The company attributed the decline to foreign exchange losses, reports PTI.

“... We expect our results to stabilise in 2012, after all the integration expenses and the accounting charges related to the acquisition (of Patni by US-based iGate) have evened out,” Patni CEO and MD Phaneesh Murthy said. In May 2011, iGate Corporation acquired an 82.4% stake in Patni Computers.

Revenues for the quarter stood at Rs822 crore, up 5.70% from Rs777.60 crore in the corresponding quarter of 2010.

The company reported a foreign exchange loss of Rs31.17 crore for the second quarter of the current year. The company had registered a loss of Rs19.76 crore in the same quarter of the previous year.

“For convenience, the company has used a cut-off date of 15 May 2011. Post 15 May 2011, consolidated financial statements reflect the push down accounting treatment,” the company said.

During the quarter, the company generated cash flow of $16.5 million from operating activities and ended the quarter with $394 million in cash and short-term investments.

As of 30th June the company’s headcount stood at 18,372.

Shares of iGate Patni were closed at Rs 320.75 on the BSE, down 3.66% from its previous close.


Steve Jobs shows the way for a new generation

Jay Elliot, who worked closely with Steve Jobs at Apple Computers, has written an interesting account of the genius who created the world’s most popular phone, which has turned the company into the second largest by market cap in the world

Steve Jobs often repeated his admiration for God, who made man, in the following words. "The hand is the most used part of your body that implements what the brain wants. If you could only replicate the hand—that would be a killer product." While Steve Jobs hasn't done that miracle, he has done well to successfully launch such Apple products like the Mac, iPod, iPhone and iPad that have become hugely popular. Jay Elliot, who has worked closely with Jobs, has written an appropriate eulogy of Steve as he enters the sunset years.

Elliot describes Jobs' best product to date in this way: "Miraculously, Steve was able to show the team from AT&T a snazzy, beautifully working iPhone with its gleaming glass screen and its bevy of sexy applications. This was way more than a phone, it was just what he had promised—the equivalent of a computer, in the palm of your hand. Steve later said that the senior AT&T official, Ralph de la Vega, described it as "the best device I have ever seen."

"By mid-2010, Apple had sold an incredible 50 million iPhones. Today, new applications are flooding the web and the Apple Store at the rate of 300 a day, with more than 200,000 to choose from. Over three years, iPhone apps became a $3 million dollar industry-Incredible! iPhone apps are coming from Windows developers as well."

Clearly, Steve Jobs is a genius, and Jay Elliot has described him well; it's a good story written by a good story-teller.

Jay Elliot pictures Jobs as a shrewd businessman, who has turned Apple into a company with the second largest market capitalisation in the world. The company's market cap, as of writing the book, was more than $280 billion. Jobs could not have achieved what he did without a passion, a commitment to excellence, great branding, and the openness to learn from mistakes.

The author praises Jobs' approach to leadership through a singular iLeadership style, which encompasses four major principles: product, talent, organisation and marketing. This creative and technological brilliance of iLeadership can be used to drive breakthroughs in any organisation, irrespective of size.

Working with a Boston Consulting firm, Jobs/Apple created a programme called "Work Out" to achieve these goals. Jack Welch of GE said about this: "Work Out is meant to help people stop wrestling with the boundaries, the absurdities that grow in large organisations. We are all familiar with those absurdities: too many approvals, duplication, and pomposity, waste. The programme turned the company upside down, so that the workers told the bosses what to do. That forever changed the way people at the company behaved."

This is a good book, in the non-fiction category, that will be a good read for every businessman and management school student.

"The Steve Jobs Way", by Jay Elliot and William L Simon, is published by Jaico Publishing House. It has 259 pages and is priced at Rs250.


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