December 15, 2012

Weekly Pulse - Dec 15, 2012

Weekly Update - Dec 15, 2012

Bharti Infratel IPO
Bharti Infratel IPO subscribed 1.3 times. Of the total shares reserved for retail investors, there were bids for just 6%, while institutional investors category was subscribed 10%.

The biggest IPO in over 2 year, made by telecom tower company Bharti Infratel, has received total subscription of over Rs 4,365 crore or 1.3 times the issue size. The IPO, biggest since Coal India's offer in October 2010, attracted bids for over 20.78 crore shares -- of the 18.89 crore equity shares offered in the main book building process -- translating to 1.3 times subscription.

Of the total shares reserved for retail investors, there were bids for just 6%, while institutional investors category was subscribed 10%.

On the other hand, the Qualified Institutional Buyers (QIBs) book, which closed yesterday, was subscribed 2 times.

The issue was in the price band of Rs 210-240 a share. It had opened on December 11.

At the upper end of the price band, Bharti Infratel was to raise about Rs 4,533.60 crore, while at the lower end it could end up with Rs 3,966.90 crore.

The equity shares are proposed to be listed on the Bombay Stock Exchange and the National Stock Exchange.

Sunil Bharti Mittal led-company Bharti Airtel, which owns about 86% of Bharti Infratel, is not participating in the share sale.

The company has said the proceeds from the IPO will be used to fund its expansion and future acquisitions.

Bharti Infratel on Monday received Rs 651.7 crore from 18 anchor investors, including Morgan Stanley and Sundaram MF.

The company had priced shares for the anchor investors at Rs 230 a piece, and allocated 2.83 crore shares (15% of the issue size) to them, Bharti Infratel had said in a filing to the BSE.

The joint book running lead managers to the IPO are DSP Merrill Lynch, JP Morgan India, Standard Chartered Securities (India) and UBS Securities India.

The issue's lead managers are Barclays Securities (India), Deutsche Equities India, Enam Securities, HSBC Securities and Capital Markets (India) and Kotak Mahindra Capital Company.

The co-book running lead managers to the issue are BNP Paribas, DBS Bank, HDFC Bank and ICICI Securities.

Bharti Infratel is the first tower company to come out with an IPO. Other players in the tower business include Anil Ambani-led Reliance Infratel, and Viom Networks -- a joint venture between Tata Teleservices and Kolkata-based Quippo Infrastructure.

Market Turn Over
Total market turnover for both the Bombay Stock Exchange and National Stock Exchange was Rs 1.81 lakh crore on Friday.

On the Bombay Stock Exchange, turnover in the cash segment amounted to Rs 2,423 crore while the derivatives segment registered a turnover of Rs 36,665 crore.

On the National Stock Exchange, turnover in the cash segment was Rs 11,382 crore while the turnover in the derivatives segment was Rs 1,30,742 crore.

Markets ended marginally lower for the week.

Markets ended lower for the week neglecting better than expected IIP data and easing inflation numbers with the Sensex down by 0.5% to 19,317.25, while Nifty down by 0.47% at 5,879.60 to end the week.

Sectoral wise, after weeks of out-performace, Small-cap and Mid-cap corrected over 1% each, underperforming the benchmark indices.

On the macro front, inflation fell to a 10-month low of 7.24% in November, from 7.45% in the previous month, increasing hopes of a rate cut by the RBI. It's the last crucial data before the RBI's monetary policy review on December 18. A rate cut by RBI would improve economic growth, languishing below six per cent for three quarters in a row till July-September 2012-13.

Economists, expects RBI will maintain a status however, said RBI will maintain a status quo on the rate front on December 18. YES Bank Chief Economist Shubhada Rao said: “We expect RBI to maintain status quo in its mid-quarter review on December 18, though it is likely to acknowledge the early moderation in price pressures.”

Also, industrial production growth rate bounced back to a 16-month high of 8.2% in October on good performance of the manufacturing, power sector and higher output of capital as well as consumer goods, indicating sudden recovery in the economy. The factory output, as measured by the Index of Industrial Production (IIP), contracted by 5% in October last year.

Meanwhile, India's exports in November contracted 4.17% year-on-year, for the seventh month in a row, to $22.2 billion, due to slowdown in demand in the US and European markets. However imports grew by 6.35% to $41.5 billion in November, leaving a trade deficit of $19.28 billion. The trade deficit increased to $19.28 billion in November 2012 from $15.83 in November 2011.

Amidst the improving macros, foreign institutional investors continued to remain positive with a purchase of shares worth Rs 13,278.20 crore for the month of December so far .

Back to the markets, among the sectoral indices, Consumer Durables, Power, Capital Goods, PSU, Realty and FMCG indices lost 1.5-4.6% and Oil & Gas slipped 0.8%. On the other hand, the winners were Health Care up 0.1%, Bankex added 0.6% and the top gainer was Auto index which rode up 2%.

The movers in the auto space were Bajaj Auto, Tata Motors, Hero MotoCorp and Mahindra & Mahindra which gained 1-7%.

Apart from the auto names, the top gainers among the Sensex-30 were Jindal Steel, Sun Pharma and HDFC which added 2-5%. The other notable gainers were Tata Steel, Reliance Industries, ICICI Bank, SBI and Sterlite which stepped up between 0.3-0.6%. Among the draggers were BHEL, NTPC, Tata Power, Bharti Airtel, Hindalco, ONGC, Coal India, HUL, Maruti Suzuki, TCS, L&T, ITC and Infosys lost 2-7%.

For the coming week, markets are likely to reamin volatile with the RBI's mid-quarter monetary policy which is scheduled on 18th of this month wherein a rate cut is anticipated.

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