DLF Limited, the largest real estate development company in India, is entering the capital market on June 11, 2007 with a public issue of 175 million equity shares of $0.05 or 5 cents (Rs.2) each through 100% book building process. The issue closes on 14th June 2007 and the price band has been fixed at $12.35 (Rs.500) to $13.6 (Rs.550) per equity share. At the upper end of the price range, DLF would raise $2.38 billion (Rs.9,625 crore). The issue will constitute 10.26% of the fully diluted post-issue capital of the company.

Kotak Mahindra Capital Company Limited, the investment banking arm of the private sector Kotak Mahindra Bank and DSP Merrill Lynch Limited, leading financial services provider joint-venture between India’s DSP Financial Consultants Limited (DSP), and U.S-based Merrill Lynch & Co are the global coordinators and book running lead managers (BRLMs) for the issue.

Lehman Brothers Securities Pvt Ltd, Indian arm of the U.S.-based financial services firm Lehman Brothers Holdings Inc is the Senior BRLM, and Citigroup Global Markets India Pvt Ltd, part of the U.S.-based Citigroup Inc largest financial services firm; Deutsche Equities India Pvt Ltd, part of the German Deutsche Bank AG; ICICI Securities Primary Dealership Ltd, investment banking arm of India’s largest private sector bank ICICI Bank Ltd and UBS Securities India Pvt Ltd, the Indian operations of UBS AG, a diversified global financial services company, headquartered in Basel and Zürich, Switzerland are the BRLMs for the issue. SBI Capital Market Ltd, the investment-banking subsidiary of State Bank of India is the Co-BRLM, while Karvy Computershare Pvt Ltd, a joint venture between Computershare Ltd, Australia and India’s Karvy Consultants Limited is the registrar to the issue

India’s largest wind turbine manufacturer Suzlon Energy Limited has finally succeeded in acquiring German wind turbine manufacturer REpower Systems AG after a prolonged bidding war with French firm Areva Group, the largest supplier of nuclear power equipment in the world. At the end of its takeover bid for the shareholders of the Hamburg-based REpower Systems AG, Suzlon now owns 33.85% shares of REpower.

In the additional acceptance period, which lasted from 11th May until the 25th of May, Suzlon received 25.46% of REpower’s capital. Suzlon now controls 87.1% of the votes in REpower owing to the 25.46% share holding and through voting-pool agreements with the other largest REpower shareholders Areva and Martifer Group, one of Europe’s largest steel construction companies.

The deal, which is the third largest overseas acquisition by any Indian company, puts the enterprise value of REpower at $1.8 billion (€1.34 billion). Areva had pulled out of the race to win the majority control of REpower last month when it decided not to raise its bid to counter the €150 ($202) per REpower share offered by Suzlon. The two rivals later joined hands to run the company.

In the last week of May 2007, Suzlon announced that is has signed a binding agreement with Areva for pooling of voting rights. Under the agreement, whenever Areva would want to sell its 32.15% stake in REpower, exclusive right would be available with Suzlon. Areva will have to retain its stake in REpower for the first year, and will have a put option any time after one year to sell the shares to Suzlon. If Areva decides to sell the stake after two years, the price would be determined based on the fair market valuations. Martifer, a unit of Portugal's top builder Mota Engil, is the third largest shareholder of REpower with 23% shares. The put option available with Martifer values its stake at about €269 ($363) million.

Tata Group, India's largest industrial conglomerate is selling its stake in the New York-based beverages company Energy Brands Inc (EBI) that sells enhanced water under the brand name Glacèau. In response to an offer received by Energy Brands (EBI) from Coca Cola Company, U.S.-based world’s largest manufacturer, distributor and marketer of nonalcoholic beverage for acquiring 100% of the capital of EBI, Tata Tea’s U.K. subsidiary Tata Tea (GB) Investments Ltd have conditionally agreed to sell their 30% shares by the end of the year for an approximate consideration of $1.2 billion, which is subject to adjustment for certain transactions and other costs. This consideration reflects an underlying enterprise value of $4.2 billion of EBI.

Tata Tea, through its U.K. subsidiary Tata Tea (GB) Investments, had acquired 25% stake of unlisted Energy Brands, and Tata Sons through its subsidiary Tata Ltd (U.K.) had acquired 5% of the shareholding of EBI in August last year. The aggregate consideration for the purchase of the entire 30% holding was $677 million based on an enterprise valuation of $2.2 billion of EBI.

Housing Development Finance Corporation Limited (HDFC), the largest mortgage lender of India, is making preferential allotment of 1.8 crore equity shares representing 7.11% of the total equity capital of the company to The Carlyle Group, a Washington, D.C. based global private equity investment firm with more than $56 billion of equity capital under management, and the world's largest financial services company Citigroup through its unit Citigroup Strategic Holdings Mauritius Limited.

The aggregate amount to be raised by HDFC through the proposed preferential issue will be Rs.3,114 crore ($768 million). The global private equity firm Carlyle Group through CMP Asia Limited, the largest non-governmental organiser of trade fairs in Asia will subscribe to 1.525 crore shares representing 5.6% holding, and the remaining part of the preferential issue will be subscribed by Citigroup. Following this deal, Citigroup's total holding in HDFC will reach at 12.3%.

Hyderabad, the capital of south Indian state of Andhra Pradesh-based Rain Calcining Ltd has announced acquiring U.S.-based CII Carbon LLC, the world's second-largest producer of calcined petroleum coke (CPC) through its subsidiary Rain/CII Holdings Inc. It will acquire all of the outstanding equity of CII Carbon, LLC (CII) for a cash purchase price of $595 million. With the acquisition of CII Carbon LLC, Rain Calcining will get production facilities in Illinois, Louisiana, Mississippi and West Virginia, and become the largest manufacturer of CPC, a material used in the production of aluminium and titanium dioxide with more than 2.4 million tonne per annum of CPC production and annual sales of $550 Million. Company anticipates the transaction will be consummated in June 2007.

SKIL Infrastructure, a Mumbai, the financial capital of India-based privately held company, has raised about $500 million by selling five-year compulsory convertible bonds to U.S. hedge fund Avenue Capital Group. It is the single-largest investment by Avenue from its $2 billion fund dedicated for infrastructure sector in India. Following the conversion of compulsory convertible bonds, 26% stake of the company will be held by Avenue, while the first generation entrepreneur Nikhil Gandhi along with his family will have about 72% stake and the remaining 2% stake will be held by U.S.-based high networth individuals. SKIL will use the funds for projects in the sub-segments of tourism, civil aviation and maritime infrastructure

Sun Pharmaceutical Industries Ltd maker of specialty pharmaceuticals and active pharmaceutical ingredients (API) has signed definitive agreements to acquire Israel-based generic drugs manufacturer Taro Pharmaceutical Industries Ltd, Israel-based manufacturer and marketer of generic and branded pharmaceuticals in a deal worth $454 million (Rs.1,850 crore). Taro has established subsidiaries, manufacturing base and products across the U.S., Israel and Canada. North America represents more than 90% of its sales. Sun Pharma intends to fund this acquisition with internal accruals and proceeds from its earlier $350 million foreign currency convertible bonds (FCCB). This deal values Taro’s equity at $230 million, or $7.75 per share which is at a 27% premium to its May 18, 2007 closing price of $6.10. Sun Pharma will also refinance $224 million in net debt of Taro. In addition, to provide immediate liquidity for Taro, Sun Pharma will provide interim financing to the extent of $45 million.

Mumbai-based Bombay Stock Exchange (BSE), the oldest stock exchange in Asia having more than $1 trillion aggregate market capitalisation of the firms listed with it, has sold its 41% stake to a group of 19 investors under the process of demutualisation mandated by the market regulator Securities and Exchange Board of India (SEBI). As per the scheme mandated by SEBI, BSE was required to ensure that at least 51% of its equity shares are held by public other than shareholders having trading rights. As part of the process, BSE had earlier announced strategic tie-ups with Deutsche Börse and Singapore Exchange with fresh issue of equity shares representing 10% of the equity capital. Additionally, shares tendered by trading member-shareholders of BSE in an offer for sale programme, have been placed with 19 domestic and overseas investors. Both the fresh issue of shares and placement of shares tendered in the offer for sale programme were priced at Rs.5,200/- ($126) per share, placing the market capitalisation of BSE at about $1 trillion. Although BSE has not disclosed the names of the 19 investors, media reports suggest that domestic financial institutions such as Life Insurance Corporation (LIC), largest life insurance company in India; State Bank of India (SBI), the largest nationalized bank and Mumbai-based Bank of India (BoI) have each purchased a 5% stake and Atticus Capital, the U.S.-based investment management firm, with $13 billion of assets under management through its wholly-owned subsidiary Atticus Mauritius has bought a 4% stake. Kotak Investment Banking, the investment banking joint venture between the private sector bank Kotak Mahindra Bank and global investment bank Goldman Sachs, was the exclusive financial advisor to this transaction.

BNP Paribas, the largest bank of France, has formed a 50:50 joint venture (JV) with SREI Infrastructure Finance Limited, a Non-Banking Financial Institution, which has a special focus on the infrastructure sector based in Kolkata the capital city of the east Indian state of West Bengal. BNP Paribas will invest $191 million (Rs.775 crore) in the JV through its leasing arm BNP Paribas Lease Group (BPLG). After having BPLG on its side, India's largest financier of infrastructure equipments SREI, which has $1,240 million (Rs.5,000 crore) of assets under its management, wants to expand the product line into financing of agriculture, information technology, medical and other equipment also.

Deccan Aviation Ltd, which operates India's largest low-cost airline Air Deccan, has sold its 26% stake to the United Breweries (UB) Group, India’s largest liquor company through preferential allotment of fresh equity at a price of $3.8 (Rs.155) per share aggregating to about $135 million (Rs.550 crore). UB Group is the world's second largest spirit manufacturer, which also operates India's leading passenger service Kingfisher Airlines. UB Group has paid Rs.150 crore ($36.5 million) upfront, and the balance amount of Rs.400 crore (97.5 million) is scheduled to be paid by the end of June 2007. As per the rules set by the market regulator SEBI, the UB Group will also make an open offer to the shareholders of Deccan Aviation for a further 20% stake. Capton G.R. Gopinath, the founder of Deccan Aviation, would remain the chairman of the company, while the UB Group head Vijay Mallya will become the vice-chairman of Air Deccan. The UB Group will have half the directors on the board of Deccan Aviation. Although the two parties would try to leverage the operational synergy between Kingfisher Airlines and Air Deccan, the operations of the two airlines would remain separate, with Kingfisher catering to the premium and normal fare segment and Air Deccan operating as a budget airline.

Delhi, the national capital of India-based Private equity firm ChrysCapital has acquired 15% stake in the Mumbai-based cable network operator and internet service provider Hathway Cable & Datacom for a consideration of around $60 million (Rs.245 crore). The founder of the company Rajan Raheja Group has sold 11% stake. Star India, the Indian arm of billionaire Rupert Murdoch's Hong Kong-based Star TV Network that had earlier picked up a 26% stake in the company for $75 million, has sold its 4% shares in the company. The deal has valued Hathway, which runs cable network in 13 cities including the cities of Mumbai, New Delhi, Chennai, Bangalore and Hyderabad, at $400 million. Following this deal, the shareholding of Raheja Group would come down to about 63%.

Tata Tea Ltd, the largest tea company of India, has announced buying 26% stake in Mount Everest Mineral Water Ltd (MEMW) and make an open offer for another 20% in a deal worth up to Rs.210 crore ($51 million). Mount Everest Mineral makes makes the Himalayan brand of water, which has a significant presence in the high end segment of the market. The deal has been structured in a combination of a preference issue of shares and a purchase of shares from the promoters at Rs.140 ($3.4) per share. It will also make an open offer to the shareholders of MEMW for another 20% shares. Tata Tea will also have the right to buy the remaining 31.10 million shares representing 9.14% of the enhanced equity from the current promoters Salim Govani and Vinod Sethi after six years.

Bharat Hotels Ltd., the New Delhi-based hotel chain that operates 14 five-star luxury hotels under ‘THE GRAND’ banner, has sold its 5% stake to Dubai Ventures, the private equity arm of Dubai Investment Group. The $40 million (Rs.160 crore) deal values Bharat Hotels at $800 million (Rs.3200 crore). The influential Suri family will hold about 92% stake in the hotel company after the deal. Bharat Hotels has a franchisee agreement with InterContinental Group, a global hospitality chain, for its hotels in the cities of Delhi, Mumbai, Goa and Srinagar. The annual revenue of the company moved up 35% during 2006-07 to reach at Rs.407 crore, and the company expects it to reach at Rs.550 crore in the fiscal year 2007-08.

IPO Announcements

ICICI Bank, the second largest bank of India, has filed the draft red herring prospectus (DRHP) of its $5 billion (Rs.20,125 crore) public issue with the market regulator Securities and Exchange Board of India (SEBI). As per the draft prospectus, ICICI Banks plans to sell $4.3 billion (Rs.17,500 crore) of shares to local and overseas investors, with a greenshoe option to raise the amount to ($5 billion (Rs.20,125 crore) if the demand is high. Out of this, 75% of the issue will be sold overseas, and the remaining 25% component will be offered in the domestic market. ICICI Bank has hired Goldman Sachs (India) Securities, the Indian investment banking arm of the U.S.-based The Goldman Sachs Group, Inc.; DSP Merrill Lynch; Enam Financial Consultants (P) Ltd, an Indian investment bank; JM Morgan Stanley, the institutional equity broking joint venture between The U.S.-based investment bank Morgan Stanley and the Indian partner JM Financial Group; and Karvy Computershare as the book-running lead managers to the issue, which is expected to come in June 2007 only.

Sterlite Industries Ltd, the largest copper producer of India and a unit of London headquarter Indian Group Vedanta Resources, has plans to list its $2 billion (Rs.8,100 crore) American Depository Shares (ADS) issue with the New York Stock Exchange (NYSE) in mid-June 2007.  It will be the largest ADS issue by any Indian company. The money raised through the sale of 125 million American Depository Shares each representing one equity share would be used to set up a 2,400-megawatt power plant in Orissa. Vedanta is setting up a 1.4 million ton alumina refinery in the eastern state, which will have a 500,000 tons a year aluminum smelter. One unit of the refinery has already started production in March 2007. Citigroup Inc, Morgan Stanley & Co., Merrill Lynch & Co. and Nomura Holdings Inc, a leading financial services group in Japan are managing the ADS issue. The ADS issue is expected to list at New York Stock Exchange in the week beginning June 18. The ADS issue will dilute the shareholding of Vedanta Resources from 80% to about 64%, depending on the exercise of greenshoe option.

Spice Communications Ltd., the 49% Indian joint venture of Telekom Malaysia Berhad (TM), has received the approval of market regulator Securities and Exchange Board of India (SEBI) to raise money through its initial public offering (IPO) of 138 million equity shares via 100% book-building process. Currently, the majority 51% stake is held by Modi Wellvest Pvt Ltd (MWPL), which belongs to Indian industrialist B.K. Modi and his family. As per the draft prospectus, the IPO will constitute 20% of the fully diluted post-issue equity share capital of the company. Following the IPO, shareholding of MWPL will come down from 51% to 40.8%. Similarly, the stake of TM will also reduce from 49% to 39.3%. Spice Communications offers GSM mobile services in the states of Punjab and Karnataka under the brand name of 'Spice Telecom'. Enam Financial Consultants is the book running lead manager of the issue. Although the company has not declared the issue amount or the price range, it had earlier indicated that it wanted to raise up $300 million through the IPO.