IFCI Ltd

IFCI Ltd

IFCI

IFCI

IFCI

We recommend a sell in the stock of IFCI from a short-term perspective. It is perceptible from the charts of IFCI that it has been on an intermediate-term uptrend from its March low of Rs 15 till the early September peak of Rs 61. However, after encountering a significant resistance around Rs 60 it changed direction. Since September peak, the stock has been on a medium-term downtrend. On October 22, the stock tumbled almost 4 per cent penetrating the intermediate-term up trendline and 50-day moving average. This decline has reinforced the medium-term downtrend. We notice that there has been a decrease in volume since early September. The daily relative strength index (RSI) is on the brink of entering into the bearish zone from the neutral region and weekly RSI is declining in the neutral region. The daily moving average convergence and divergence (MACD) indicator has entered into the negative territory. Our short-term outlook on the stock is bearish. We anticipate the stock’s fall to prolong until it hits our price target of Rs 47 in the upcoming trading sessions. Traders with a short-term perspective can sell the stock while maintaining a stop-loss at Rs 55.

via BL

IFCI

We recommend a sell in IFCI stock from a short-term trading horizon. It is evident from the charts of IFCI that it bottomed in early March, taking support around Rs 16, which is a key intermediate-term support level. Since March low the stock has been trending up and is on an intermediate-term up-trend. The stock’s up-trend accelerated steeply in mid-May. However, after penetrating a key resistance at Rs 40, the stock encountered another resistance at Rs 60 recently. On June 5, the stock decline 5 per cent forming a dark cloud cover candlestick pattern. This pattern is a short-term bearish reversal pattern. Moreover, we notice that the daily relative strength index is displaying negative divergence, triggering the stock’s reversal. The weekly indicators are in overbought territory signalling near-term correction. The volumes are gradually reducing over the past three trading sessions. We take a contrarian view on the stock from a short-term perspective and anticipate it to tumble further until it hits our price target of Rs 48 in the approaching trading sessions. Traders with short-term perspective can sell the stock while maintaining a stop-loss at Rs 56.5.

via BL

IFCI - stake sale again ?

Reliance Industries and Standard Chartered may reportedly be the surprise co-bidders for a strategic stake in lender IFCI. On Thursday (29 May 2008), IFCI revived its plan to get on board a strategic investor, after an earlier plan in December fell apart, the reports added.

Tata Teleservices Maharashtra (TTML) is reportedly in merger talks with Quippo Telecom Infrastructure, a Srei group company, for its tower arm Wireless Tata Telecom Infrastructure.

Hanung Toys and Textiles is reportedly close to acquiring a US home furnishing marketing company and may sign a preliminary agreement with the $20 million firm in the next two weeks.

Bombay Dyeing has reportedly sold off its dimethyl terephthalate (DMT) plant situated at Patalganga, Maharastra to a Gujarat-based trading company Laxmiraj for an undisclosed amount.

Reliance Power goes ex-bonus on a bonus of 3:5 today. New futures and options (F&O) contracts will be issued today. F&O lot size 500 shares, options strike prices between Rs 10-1230.

Tamil Nadu Newsprint & Papers reported a 26.1% rise in net profit to Rs 27.38 crore on a 10.9% increase in sales to Rs 250.22 crore in Q4 March 2008 over Q4 March 2007.

Aegis Logistics reported a 74.9% rise in net profit to Rs 12.03 crore on a 75.8% increase in sales to Rs 115.14 crore in Q4 March 2008 over Q4 March 2007.

Punj Lloyd, Dabur Pharma, Deepak Fertilizers, Evinix Accessories, Gujarat State Fertilizers, Indo Tech Transformers, LG Balakrishnan, Nagarjuna Construction, Nitin Spinners, Northgate Technologies, Sobha Developers, Sun Pharmaceuticals, Tata Tea, Welspun India, among others will declare their March 2008 ended results today.

Social Picks - IFCI is a ...

IFCI is a ..

BUY 211 (60%)

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Social Picks - IFCI is a ...

New stock for the Social Picks - IFCI

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IFCI - no stake sale !

IFCI, India’s oldest financial institution saddled with bad loans, on Wednesday called off its stake sale plan after marathon talks with the Sterlite-Morgan Stanley combine ended in disagreements over the price and management control.

"Compelling conditions including management control were the reason for the deal not taking place," said an IFCI source, adding that the consortium had put conditions that were tantamount to a hostile takeover.

A press release from IFCI said since the bid was made on the condition that the consortium would take over the management of the company, it was decided not to proceed with it.

According to sources close to the development, the Sterlite-Morgan Stanley consortium was offered management control at Rs 145 a share, which it did not accept.

IFCI then quoted Rs 111 apiece with three of the eight board seats. The bidders, however, insisted on five board seats at this price. At this point, the deal was called off.

There have been ample indications from IFCI and government quarters that the strategic investor, which would have had to make an offer to acquire an additional 20 per cent in the company, would not be allowed to take management control.

The process to induct a strategic investor began in August.

Sources said management control to a private player would have created uncertainties about the fate of top functionaries of IFCI. This caused the deadlock.

"We have made the best bid to achieve the objective set out by IFCI in its offer document. The IFCI board decided not to accept the offer. We respect it," said a Sterlite executive.

It is learnt that IFCI will launch a fresh exercise to get a strategic partner. Insurance behemoth Life Insurance Corporation of India, IFCI’s largest shareholder with 8 per cent, may be a surprise entrant.

IFCI has also decided not to pursue the stake sale plan with any bidders under the current format. Two other consortiums — Shinsei Bank-Punjab National Bank-JC Flowers and Cargill Financial Services Corporation-Texas Pacific Group — had also submitted bids for the stake, but had quoted a lower price than Sterlite and Morgan Stanley.

However, it seems IFCI was aware of the possible complexities and, therefore, was simultaneously in talks with International Finance Corporation (IFC) and Asian Development Bank for a possible stake sale.

IFC may take around 10 per cent in the company.

IFCI stake sale off ...

It's official now. The IFCI board on Monday called off the sale of 26% of its equity to its only bidder — Sterlite and Morgan Stanley — over irreconcilable differences regarding the degree of management control. The way forward is still not clear for IFCI, which had planned to rope in a strategic partner to fund its future business. India’s oldest development financial institution is facing a resource crunch.

On the future course of action, Atul Rai, CMD IFCI conceded that there is need for capital for IFCI. “There is no possibility for a re-bid in this format. There has to be a certain time lapse before the system can gear up for a re-bid. This proposition has not made sense to 10 of the best bidders in the world; it will not change substantially very soon.”

This comes even as the Wilbur Ross consortium is understood to be making efforts to renegotiate with IFCI to put in a bid. But officials maintain, legally, IFCI cannot entertain any offers from this process. The consortium headed by Mr Ross comprised of Standard Chartered bank, Goldman Sachs and HDFC, and did not put in its bid after conducting due diligence.

Said Mr Rai: “There is disappointment that the entire effort that lasted six months did not translate into a deal. But the board was not agreeable to the conditional offer made by the only bidder.

From the perspective of the investor, they had a certain set of conditions and they are answerable to their shareholders, but it could not be accommodated by IFCI since it changed the nature of the transaction.” While IFCI offered two seats on the eight-member board, the bidder wanted three. Sterlite also wanted to replace the CEO — a non-negotiable condition.

Sources said, Sterlite wanted far greater control for the 26% sale in return for paying more than $1 billion, at Rs 110 a share. “Rights of minority shareholders could have been jeopardised in the long term. The exclusivity of control that they sought was unacceptable to the board. If the board had spelt out these additional conditions in the Request for Proposal (RFP) stage, IFCI could have attracted more bidders at a higher price.”

“We have made our best offer for IFCI to achieve the objective, such as making IFCI a world class institution, retaining existing talent, bringing in new talent and more expertise. We respect the government’s decision not to go ahead with the strategic sale,” an official statement from Sterlite said.

A senior government official, however, said there was no direct intervention from the government. “IFCI is a quasi-government institution and government guidelines apply to it. Under the Chief Vigilance Commission’s (CVC) guideline, a single bidder with a conditional offer cannot be appointed as an investor. Several conditions made by Sterlite were non-negotiable.” He also said that government was open to supporting IFCI in future.

The process that was kicked off earlier this year helped boost IFCI’s stock price from Rs 12 in January to Rs 121 earlier this week. The sale was fraught with uncertainties till the last minute with respect to capital structure and regulatory issues, among others. Detractors were crying hoarse on the non-transparency of the process.

During the entire course of events, rumours were rife that the sale would never take place. Along the way, IFCI allowed creditor banks to convert their debt worth Rs 1,479 crore into equity. There was no clarity on the status of the government’s loan to IFCI before the bids closed.

IFCI plunges

Shares of IFCI plunged over 10 per cent in morning trade, as the board could not reach a final decision on the induction of a strategic partner for which discussions continued for the second day on Tuesday.

The IFCI scrip fell to an intra-day low of Rs 97.40 down 10.14 per cent in the morning trade, as against yesterday's close of Rs 108.40 on the Bombay Stock Exchange.

Vedanta Group company Sterlite Industries, in association with Morgan Stanley, is the front-runner for picking up a 26 per cent stake in the financial institution.

A final decision on the bidder for the 26 per cent stake sale and the price of sale is expected to be finalised today at the board meeting which is continuing from yesterday.

The scrip was trading at Rs 104.40, down 3.69 per cent at the BSE, while a total of 2.26 crore shares had changed hands at the bourse in the afternoon trade.

The other bidders included consortia of Shinsei Bank Ltd of Japan, Punjab National Bank and JC Flowers and US-based Cargill Financial with Texas Pacific Group.

However, the consortium of W L Ross, GS Capital Partners VI Fund and Standard Chartered Bank opted out of the race to acquire a strategic stake in the country's oldest financial institution.

3 suitors left for IFCI

The race for picking up 26% stake in IFCI has narrowed down to three players. While the consortium formed by WL Ross, GS Capital Partners VI Fund and Standard Chartered Bank has opted out, three consortia submitted financial and technical bids on Friday. Those in the fray include consortium led by Sterlite Industries of Anil Agarwal, Shinsei Bank and Cargill Financial.

While Sterlite Industries has tied up with Morgan Stanley, the Shinsei Bank consortium includes Punjab National Bank and JC Flowers & Co. According to sources familiar with the proposed stake sale, the bid from Cargill Financial is in tie-up with Texas Pacific Group.

While there was no official word about the bids, the IFCI board is expected to consider them on December 17. Once the board picks a winner, the consortium concerned has to get approvals from regulatory bodies.

The process of inducting a strategic partner for IFCI started in August and is expected to be completed in a month from now.

Initially, nearly 10 suitors had expressed interest in buying stake in IFCI. However, only eight were shortlisted by the IFCI board, with Kotak Mahindra Bank and Newbridge Capital exiting the race at this stage. Of the shortlisted eight, only four undertook due diligence of IFCI.

With the WL Ross-led consortium not bidding, the race has now narrowed down to three players. The induction of a strategic partner is aimed at bringing in financial resources and management expertise without diluting the basic character of IFCI as a development financial entity.

It is believed that IFCI has fixed Rs 107 per share as a rate for converting bonds issued to public sector banks and insurance companies into equity. The institution had plans to convert Rs 900 crore of optionally convertible bonds issued to PSBs into equity.

However, it was decided later that the conversion would be limited to Rs 579-crore worth of bonds. This will ensure that public sector insurance companies retain their shares at the existing level of 13%, even after offloading 26% to a strategic partner. After the conversion and induction of a new partner, the stake of banks in IFCI would be more than 25% and government-controlled organisations would hold over 38%

How do you think will pick up stake ? Our prediction is Sterlite consortium

IFCI suitors worried about stake stability

Potential buyers of a 26 per cent stake in the government-owned Industrial Finance Corporation of India's (IFCI), the country's oldest financial institution, have raised concerns over the stability of their shareholding and board representation.

Interested parties are concerned about the possibility of 24 domestic banks and six financial institutions converting to equity Rs 1,480 crore worth of zero-coupon debentures to which they subscribed in 2002-03.

They are also worried at IFCI’s inability to accommodate more than three or four representatives from the prospective strategic investor on its 15-member board.

The IFCI board is expected to meet on Monday to discuss these issues.

Representatives of two potential buyers told once the debentures are converted, the strategic investor’s equity and, therefore, control will be reduced.


Sources at IFCI, however, said no time frame has been decided for the conversion. “The conversion has to follow certain legal procedures, including approval from the IFCI board. Nothing will be done which could impact strategic investors' interests,” they added.

On the issue of board representation, one suitor said: “Four seats on the board will not be in tune with the strategic investor’s equity holding of 26 per cent.”

In addition, the suitors said, the idea of buying 26 per cent was aimed at an eventual control of the company. Under the law, any acquisition of more than a 15 per cent stake requires a mandatory 20 per cent open offer for retail shareholders.

The successful bidder will eventually emerge as the largest shareholder in IFCI with nearly 46 per cent after an open offer.

“But the present structure of the IFCI board is averse to offering the majority of the board seats to the successful bidder. This will defeat the purpose of acquiring a majority stake,” he added.

The IFCI stock today closed at Rs 83.80 on the Bombay Stock Exchange, 3.29 per cent lower than yesterday's close. At this rate, the company's valuation of the company stands at Rs 5,352 crore. So an acquisition of 26 per cent is estimated at Rs 1,392 crore.

Sources close to IFCI said the effort to strike a balance between the interest of the bidder as well as other stakeholders is on. “We are hopeful of finding a solution,” they said.

IFCI soars after short-listing 8 bidders

Shares of IFCI shot up by more than 10% on Friday after a financial daily reported that the public sector term lender has shortlisted eight bidders for the proposed sale of a 26% stake.

The newspaper report says that the list of shortlisted bidders includes the consortiums led by Wilbur L Ross and Shinsei Bank. However, the names of those bidders who have been left out have not been disclosed.

At 12:56 p.m., IFCI was quoting at Rs98, up Rs5.20 or 5.6% over the previous close. The stock earlier touched an intra-day high of Rs102.45 and a low of Rs94.15. The stock has gained over 18% in the past one week and a whopping 58% in the past one month.

As many as 10 bidders had submitted bids for acquiring a 26% stake in IFCI. Other members of the consortium led by Wilbur Ross include Standard Chartered Bank, HDFC and Goldman Sachs. Punjab National Bank (PNB) and JC Flowers are part of the consortium led by Shinsei Bank.

Others who had submitted EoIs included Blackstone, IDFC, Kotak Mahindra Bank, GE Capital, Cargill, Newbridge Asia, Natixis and a consortium between Sterlite and Morgan Stanley.

IFCI sources have been quoted as saying that, at this stage, it would not make sense to reduce the number significantly and therefore impact the competitive pricing of the valuation.

The shortlisted bidders would be informed latest by October 1. A pre-bid conference is scheduled for October 3. Thereafter, the shortlisted suitors would be asked to undertake due diligence.

Requests for Proposal (RFP) would be issued a week later. By November, financial bids would be submitted. The Board would then finalise the name of the strategic investor.

There is a lock-in period of three years for the entity or the consortium that would be selected. In addition, the bidders should be in the business of financial services with a long-term interest in the institution.

IFCI - Blackstone, IDFC, Kotak, Morgan Stanley, Cargill

Ifci Limited has informed the Exchange vide its letter dated September 15, 2007 that: "Pursuant to inviting Expression of Interest from Strategic investors, following applications have been received : 1) General Electric Capital Corporation. 2) Kotak Mahindra Bank Limited. 3) Consortium of Sterlite Industries (India) Limited and Morgan Stanley & Co. 4) Infrastructure Development Finance Company Limited. 5) Newbridge Asia IV, L. P. 6) Consortium of WL Ross & Co. LLC, GS Capital Partners VI Fund, Standard Chartered Bank & Housing Development Finance Corporation Limited. 7) Cargill Financial Services Corporation. 8) Consortium of Shinsei Bank Limited, Punjab National Bank and J.C. Flowers & Co. LLC. 9) Natixis 10) The Blackstone Group L.P."

IFCI Update

N Balasubramanian, chairman of ailing industrial lender IFCI which is looking for a strategic partner for stake sale, has resigned citing his conflicting role as adviser to one of the bidders.

The development would not affect the process of 26% stake sale by IFCI as financial bids from interested parties were yet to be invited, a key company official told PTI.

Balasubramanian, who resigned with immediate effect before Expressions of Interest (EoI) from 10 entities were opened yesterday, is no longer IFCI Chairman, the official said, speaking on condition of anonymity.

The board would ratify his decision, besides taking up "other routine issues" at its meeting scheduled for September 20. The board meeting will be followed by shareholders' meeting the next day, the official added.

Balasubramanian was also adviser to Standard Chartered Bank, one of the entities in a consortium, that has submitted EoI. A consortium-led by WL Ross, including Standard Chartered Bank, Goldman Sachs and HDFC has submitted the EoI.

Efforts to revive IFCI moved ahead after Balasubramanian assumed charge of the office in early August this year. EoIs were invited from August 13.

Besides a consortium-led by WL Ross, nine other companies and consortia have evinced interest in picking up stake in IFCI.

Of them, seven are stand-alone including domestic financial institutions IDFC, Kotak Mahindra Bank, GE Capital, Cargill, French banking company Nataxis, US-based private equity fund managers Blackstone and Newbridge.

Updated at 1845 hrs: As many as 10 domestic and foreign financial institutions and consortia have evinced interest in picking up 26% stake in IFCI, the expressions of interest for which were opened today.

Out of 10 suitors, seven are standalone including domestic financial institution IDFC, Kotak Mahindra Bank, GE Capital, Cargill, French banking company Nataxis, US-based private equity fund manager Blackstone and Newbridge, an IFCI official said.

The interested parties also include three consortia including one between W L Ross, Standard Chartered Bank, Goldman Sachs and HDFC, and another between Punjab National Bank with Shinsei Bank of Japan and US-based investor JC Flowers, he added.

Besides, Morgan Stanley in consortium with Sterlite Industries has also evinced interest in the picking up stake in the financial institution.

As on March 31, 2007, Morgan Stanley and Goldman Sachs had 2.5% and 3.3% stake respectively in IFCI.

The company will evaluate the EoIs and announce the shortlisted investors on September 25.

Thereafter, the shortlisted entities would be asked to undertake due diligence and submit bids indicating the price they would be willing to pay for the 26% stake.

Based on the technical and financial bids, the board would finalise the name of strategic partners. Request For Proposal (RFP) would be floated by October 1.

The pre-qualified investors will need to submit sealed financial bids by November end.

Ernst & Young (E&Y) had been appointed by IFCI as consultant to find a strategic partner for reviving the financial institution.

Rumour Mill : IFCI turns down offer

IFCI has turned down UTI bank's offer at 85 bucks per share to Sellout.

IFCI could enjoy a longer run if the market continues with its bull run

Disclaimer: Rumours are trash - don't believe them :)

IFCI

IFCI

IFCI, Cinemax most traded in terms of volume on BSE

IFCI topped the volume chart for the second day in a row after NSE allowed fresh positions in the derivatives segment of the scrip.

Newly-listed Cinemax India followed by IDBI, Himachal Futuristic Company, Reliance Natural Resources, Infrastructure Development Finance Company, Gujarat Ambuja Cement, Hindalco Industries and Tata Teleservices were the other volume toppers for today.

IFCI surged 8.07% to close at Rs 28.80, on a massive 3.26 crore shares after NSE removed curbs on fresh positions in the derivative contracts of the company. The scrip has clocked an average daily volume of 61.75 lakh shares in the past one year.

Theater chain operator Cinemax India debuted today and a huge 1.09 crore shares changed hands. The stock debuted at Rs 175, hit a low of Rs 145 as also a high of Rs 178.90. The scrip closed at Rs 152.35 compared to the IPO price of Rs 155.

On the third position, IDBI rose 3.67% to close at Rs 91.90 on a huge volume of 56.68 lakh shares, compared with an average daily volume of 11.04 lakh shares in the past one year.

The other high volume gainers were Himachal Futuristic Company, at 74.76 lakh compared with yesterday’s volume of 46.97 lakh shares (The scrip’s average daily volume is 26.49 lakh shares in the past one year), Reliance Natural Resources at 44.35 lakh shares compared with yesterday’s 50.64 lakh (33.45 lakh shares was the average daily volume in the past one year), Infrastructure Development Finance Company at 23.54 lakh shares (18.22 lakh shares), Gujarat Ambuja Cement at 40.75 lakh shares compared with yesterday’s 48.12 lakh shares (16.82 lakh shares), and Tata Teleservices at 36.61 lakh shares compared with yesterday’s 48.83 lakhs (17.19 lakh shares).

The bourses were gripped by extreme volatility running for the fourth straight day, as a host of factors including a hike in CRR rates outweighed any bullish sentiment. The Sensex managed to settle above the 14,000 level, as strong buying, most of which can be attributed to short-covering in derivatives, at lower level kept the losses within manageable limits.

The 30-shares BSE Sensex lost 81.08 points, at 14,009.90. It had opened lower, at 13,990.41, and plunged to 13,805.36 under intense pressure. Value-buying, however, propelled the Sensex from the lower level in the late-afternoon session. The BSE Sensex also hit a fresh high of 14,036.61, as buying picked up.

Surprisingly, the S&P CNX Nifty was up 2.55 points, to 4,047.10, due to a higher weightage of Wipro, which sustained strength throughout the day.

IFCI , ENAM - TCS

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