SJVN prices IPO at top end; Jaypee at bottom

Both offers will issue shares to retail investors and employees at a 5% discount to the issue price

Two companies priced their initial public offers on Monday at the opposite end of their indicated band, company and sources said, showing investors were reticent to back high-priced share sales, reports PTI.

State power utility SJVN Ltd (earlier known as Satluj Jal Vidyut Nigam Limited), which raised $240 million, said in a newspaper advertisement it set the price at the top end of the Rs23-26 share range.

The IPO was the first share sale by the government in this fiscal year that started on April 1 and was covered 6.6 times when it closed on 3rd May.

Institutions had bid almost nine times their allotment, while retail investors bid three times their quota.

On the other hand, private-sector road builder Jaypee Infratech raised about $502 million after the deal was priced at the bottom of its Rs 102-Rs117/share range, according to sources with direct knowledge.

The company, a unit of construction firm Jaiprakash Associates, had received most bids at Rs102 and was covered 1.24 times.

Jaypee Infra is developing the 165-kilometre, six-lane Yamuna Expressway in Uttar Pradesh at a cost of $2 billion.

The expressway will connect Noida, near Delhi, with Agra, where the Taj Mahal is located. The company plans to develop real estate of about 25 million square metres along the expressway.

Both offers will issue shares to retail investors and employees at a 5% discount to the issue price.


No buyers for electric two-wheelers in April

After declining about 89% during FY10, electric two-wheelers failed to get a single customer in April 2010, raising questions about their future

According to the Society of Indian Automobile Manufacturers (SIAM), electric two-wheelers are dying a slow death. During April 2010, not a single electric two-wheeler unit was sold in comparison to 594 units sold last year.

Last month, Naveen Munjal, president of the Society of Manufacturers of Electric Vehicles (SMEV), had said that the state of affairs of the electric vehicles (EVs) industry is very poor. "The industry will not survive very long, unless there is government intervention. We need government support," he said.

Sales of electric two-wheelers have been on a downward journey for the past few years. During FY10, sales for electric two-wheeler tumbled 89% to 3,001 units from 26,445 units a year ago.

According to a PTI report, the Indian government has been contemplating a policy for EVs in the country, for which an inter-ministerial group was conducting a feasibility study.

Currently, 4% excise duty is levied on production of EVs, while the components for EVs come under 10% excise duty net, which the manufacturers are urging the government to waive. The import of EVs attracts 14% duty and there is a 4% duty for import of parts.

On the sales front, while Delhi, Rajasthan, Uttarakhand and Lakshadweep do not levy any sales tax, other States charge 4%-15% sales tax or value-added tax (VAT).

The industry can create a niche for itself in three to five years, but with government help, it can be done much faster, Mr Munjal added.

The size of the EV industry is pegged at about 85,000 units annually. The market is dominated by Electrotherm India Ltd and TVS Motor Co Ltd. According to media reports, Mahindra and Mahindra, the country's largest utility vehicles maker, is also planning to launch an electric variant of its current scooters, ‘Rodeo’, ‘Duro’ and ‘Flyte’.



k Kuchroo

6 years ago

if a bike is with a price tag of rs 5000 it will be run away success.but our industry is lead by leaders like Rahul Bajaj(who intialy rubbised nano effort)Munjals cannot see beyond some duty or some tax offset

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