Stocks
Two-thirds of QIPs from 2010 trading at huge discount, says Crisil study

 Median return on investments on about 50 QIPs issued in 2010, calculated up to 3 June 2011, is a negative 19%. Fewer companies likely to raise funds through this route over next few months

Two out of every three Qualified Institutional Placements (QIPs) done in calendar year 2010 have given negative returns and this is likely to dissuade other companies from using this route to raise funds over the next few months.

According to a study by ratings agency CRISIL, 33 out of 50 QIPs were trading below their offer prices. The median return on investments, calculated up to 3 June 2011 was a negative 19%. This compares with a positive 2% in the broader S&P CNX NIFTY in the same period.

Real estate, construction, IT and ITeS, and textile companies were the major underperformers.

"Fund raising through QIPs has dried up in 2011. Given the current market conditions, we expect investors' appetite for QIPs to remain low," said Tarun Bhatia, director - capital markets, CRISIL Research. "This, coupled with the weak performance of past QIPs, may restrict investors from investing in upcoming issues. So, companies may have to search for an alternative route to raise funds."

Only one company successfully carried out a QIP during January-March 2011, raising Rs4 billion, compared to six companies that raised Rs19 billion in the previous corresponding quarter.

The worst performer (in percentage terms) was Aksh Optifibre. The stock is trading 66% below the offer price. On the other hand, Welspun India's issue generated maximum wealth. The Welspun stock price is trading 72% higher than its offer price.

In 2010, an improvement in the economic scenario saw a significant spurt in QIP activity with 50 companies raising about Rs225 billion through this route. More than half the amount, or about Rs125 billion, was raised by about 20 companies in financial services, real estate and construction, IT&ITeS, and automobile (and auto component) manufacturers. The largest issue was by Adani Enterprises which raised Rs40 billion in August 2010.

Mr Bhatia pointed out that companies generally preferred the QIP route to take advantage of better pricing during a bull run. However, recent governance-related issues and the Reserve Bank of India's monetary tightening had dampened investor sentiments.

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COMMENTS

nilesh mehta

6 years ago

can i have detail list of all these company

Anil Agashe

6 years ago

Good for them QIPs were not known to invest at right valuations anyway in most cases. And if they are investing in smaller companies then the risk will be more. What is interesting to know is how many of them used CRISIL's research?.

Have toolbox to deal with tax havens not sharing info: FM

As per the ‘toolbox’ to check black money, payments made to entities located in countries and tax jurisdictions that refuse to share tax-related information will attract a withholding tax, or tax deducted at source, of 30% or more

New Delhi: Under pressure from civil society to take concrete action on black money, the government today said it has enough tools to deal with transactions arising from non-cooperative jurisdictions and would take action as and when necessary, reports PTI.

“We have developed a toolbox... We have enabled ourselves to declare (tax havens) as non-cooperating jurisdiction and countries as and when the situation arises. We will take appropriate steps,” finance minister Pranab Mukherjee told reporters here today.

However, he added that as of now, ‘no country’ has been put in the category of a ‘non-cooperating jurisdiction’.

India, the minister said, is negotiating Double Taxation Avoidance Agreements (DTAA) with several countries and also entering into Tax Information Exchange Agreements (TIEA) with tax havens.

‘We are getting substantial co-operation,’ he said.

The government, the minister further added, has developed a ‘toolbox’ to deal with non-cooperative jurisdictions by making appropriate changes in the Income Tax Act, 1961.

As per the ‘toolbox’ to check black money, payments made to entities located in countries and tax jurisdictions that refuse to share tax-related information will attract a withholding tax, or tax deducted at source, of 30% or more.

The G-20 leaders had asked each country at the Seoul summit last year to develop a toolbox of counter-measures against non-cooperative jurisdictions.

Under the proposed provisions, the government will notify the countries and jurisdictions that are reluctant to share banking information and other details with it.

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Ansal Properties sells Rs400 crore worth properties in May

Ansal Properties has sold nearly Rs400 crore worth projects, comprising 2.93 million sq ft of spaces in May this year

Witnessing robust demand, realty firm Ansal Properties & Infrastructure has sold nearly Rs400 crore worth projects, comprising 2.93 million sq ft of spaces in May this year.

According to an operational update sent to its investors, the company has sold nearly Rs700 crore of projects in the first two months of this fiscal.

In May 2011, the company booked sales of 2.93 million sq ft, aggregating to sale value of about Rs397.7 crore, the presentation said.

The major chunk of this sale was contributed by two of its residential projects in Gurgaon-Esencia and Fernhill, it added.
"Consequently, the total area sold in two months in FY12 increased to 6.43 million sq ft, aggregating to sale value of about Rs698.9 crore," the company said.

Out of its different residential projects, group housing scheme received highest demand by registering Rs195.05 crore worth sale.

It was followed by villas with Rs94.44 crore sales and plots with Rs62.93 crore sales, Ansal Properties said in the presentation.

Besides, the company told its investors that it had collected Rs147.2 crore from its customers in May. Following this collection, the National Capital-based firm has generated Rs295.7 crore in this fiscal.

Earlier, Ansal Properties had said it planned to reduce its debt by about Rs350 crore in 2011-12 through its cash flows, which was expected to be around Rs2,000 crore in this fiscal.

The company has a net debt of Rs1,484 crore as on 31 March 2011. It has come down from Rs1,630 crore a year-ago.

The real estate developer at present has a net land bank of over 8,500 acres in various locations across the country.

The company had reported a consolidated net profit of Rs13.55 crore for the quarter ended 31 March 2011, compared to a loss of Rs31 lakh in the year-ago period due to robust demand. The net sales increased by 61.32% to Rs330.16 crore from Rs204.66 crore in the same period last year.

For the entire 2010-11, the consolidated net profit of the company soared by 52.16% to Rs108.05 crore from Rs71.01 crore in the previous fiscal. The net sales in FY11 jumped by 48.68% to Rs1,287.82 crore from Rs866.14 crore in FY10.

On Monday, Ansal Properties ended 0.84% down at Rs41.10 on the Bombay Stock Exchange, while the benchmark Sensex declined 0.01% to 18,266.03.

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