Blackstone Group LP (BX.N), the world’s largest alternative asset manager, is close to securing a major managed account on behalf of CalPERS, one of private equity’s largest investors, a source familiar with the matter said on Friday.
In an increasingly competitive fundraising environment, diversified private equity firms have been capitalizing on their scale by offering large pension funds the opportunity to invest in special accounts across their investment funds.
This boosts the assets under management of firms such as Blackstone, which have moved beyond buyouts into areas such as credit, hedge funds and real estate. In exchange for their major commitments, the investors get a break on management fees.
An agreement between CalPERS and Blackstone could be reached as early as next week, the source said, without elaborating on the size of the deal or its details. The source was not authorized to speak publicly about the issue and asked not to be identified.
Spokespeople for Blackstone and CalPERS declined to comment.
The CalPERS commitment would represent a coup for Blackstone after the New Jersey Division of Investment(NJDOI), which manages a $66.2 billion pension fund, agreed last December to invest $1.8 billion across Blackstone’s investment businesses, bringing its total commitment to $2.5 billion. <ID:N1E7B70VA>
Blackstone rivals KKR & Co LP (KKR.N) and Apollo Global Management LLC (APO.N) had raised the “mega-mandate” stakes a month before by announcing they would manage $3 billion each on behalf of the Teacher Retirement System of Texas.
Private equity firms typically charge around 1.5 percent of committed capital as a management fee but investors may pay different fees based on the size of their commitments. “Mega-mandates” allow investors to pay lower fees for big commitments.
Some 1,853 private equity targeting a total of $787 billion were fundraising as of the start of the second quarter, a 19 percent year-on-year rise in the aggregate capital sought, according to market research firm Preqin.
Blackstone, whose investments include The Weather Channel, Pinnacle Foods and SeaWorld Parks & Entertainment, has seen its assets under management swell to a record $190 billion as of the end of March.
Its latest buyout fund, Blackstone Capital Partners VI, has raised over $16 billion; its flagship real estate fund, Blackstone Real Estate Partners VII, has raised about $10 billion while its new energy fund has accumulated about $1.5 billion in committed capital.
CalPERS, the California pension fund for public employees, had invested $825,972 million in Blackstone shares and a total $771 million in several of its funds as of the end of June 2011, according to the latest data available on its website.
Fortune’s Dan Primack reported on the deal between Blackstone and CalPERS earlier on Friday.
CIL TO INVITE BIDS FOR EXPLORING MOZAMBIQUE MINES SOON
NEW DELHI: State-owned Coal India (CIL) will soon invite fresh bids for exploration of its two coal mines in Mozambiquehaving reserves of over one billion tonnes, according to sources. “Very soon, CIL will float tenders for exploration of its two coal blocks in Mozambique,” sources said. The development comes at a time when the country is facing coal shortage, estimated at 142 million tonnes in the last fiscal. CIL, the world’s largest coal producer, had invited tenders twice— first in 2010, which was cancelled due to shortcomings and the second in June, 2011, for exploratory drilling of its blocks. The company that was shortlisted during the second tender in June had put some additional conditions as a result of which the tender became invalid, a CIL official had said earlier. (For details log on to : http://www.business-standard.com/india/news/cil-to-invite-bids-for-exploring-mozambique-mines-soon/164254/on)
COAL MINISTRY PLANS SOVEREIGN FUND FOR COAL BUYS ABROAD
NEW DELHI: The coal ministry has proposed a sovereign fund to facilitate the acquisition of coal properties abroad. The proposal comes following the demands from steel, fertiliser and power companies that have been trying hard to buy mineral assets in countries like Indonesiaand Australia. “Though Coal India has surplus resources for investing outside, it is important to have financial support from the government for acquiring very large assets abroad,” coal minister Sriprakash Jaiswal told reporters on the sidelines of a CII conference. Jaiswal said the size of the fund and other modalities would be worked out once the proposal is approved. “There are issues that need to be resolved urgently in regard to acquisitions abroad. The decision-making process needs to be fast-tracked and a policy support framework needs to be established to overcome risk aversion,” he said. (For details log on to : http://www.financialexpress.com/news/ministry-plans-sovereign-fund-for-coal-buys-abroad/945528/)
POWER COMPANIES TO MEET COAL INDIA ON FSA, BUT DEADLOCK MAY PERSIST
KOLKATA: The push by power companies for better fuel supply agreements (FSAs) with Coal Indiaseems pointless. Not only is Coal India (CIL) bound by the conditions in the FSAs since these were approved by its board after a presidential decree, the world’s largest coal company also has a virtual monopoly over coal supplies within the country. Ever since CIL’s board cleared FSAs with clauses such as a mere 0.01 percent penalty in case of supply shortfalls, power companies have been resisting. Of 48 FSAs that were to be signed – for power plants that were commissioned till December 2011 – only seven or eight have been signed until now. NTPC, DamodarValleyand other large power public sector undertakings (PSUs) are holding out and so are a majority of the others, including some private-sector power suppliers. They all want the penalty clause to be more stringent on supply shortfalls and coal supplies to plant sites instead of ports and coal. NTPC also wants coal to be supplied according to the older useful heat value (UHV) norm, instead of the gross calorific value (GCV) method CIL has adopted now. (For details log on to : http://www.firstpost.com/business/power-cos-to-meet-coal-india-on-fsa-but-deadlock-may-persist-298294.html
RICH HOMES MAY PAY DOUBLE FOR LPG
NEW DELHI: Households with a monthly income of Rs. 50,000 or more may soon have to pay the market price of cooking gas (LPG), which is Rs. 480 more than the current price of around Rs. 400 per cylinder. Top petroleum ministry sources said a proposal to restrict the supply of subsidised LPG cylinders to the affluent class is ready for consideration of the empowered group of ministers (EGoM) under finance minister Pranab Mukherjee. The idea is to replicate what happened a few years back, when people who could afford stopped buying food grains from public distribution system (PDS) shops despite having ration cards. As a first step, it is proposed to withdraw the supply of subsidised cylinders to all members of Parliament, MLAs and first class gazetted officers. This scheme will then be extended to all households with a monthly income of Rs. 50,000 or more. (For details log on to : http://www.hindustantimes.com/business-news/Markets/Rich-homes-may-pay-double-for-LPG/Article1-850820.aspx)
PATEL BATS FOR BHEL, WANTS RAIL UNITS PLAN SCRAPPED
NEW DELHI: Heavy industries minister Praful Patel wants the Prime Minister to stop the railways from building two electrical equipment factories on concern the units will curb the transporter’s purchases from state-owned Bharat Heavy Electricals Ltd (Bhel). He has written to Prime Minister Manmohan Singh and railway minister Mukul Royasking that the proposed factories at Vidisha in Madhya Pradesh and Shyam Nagar in West Bengalbe scrapped. Mint has a copy of the letters. Bhel falls under the remit of Patel’s ministry. “While there has already been a considerable reduction in sourcing of electrics from Bhel due to the technological changes at Indian Railways, with the setting up of above facilities, there would be practically no sourcing of electrics from Bhel, which may result in huge dedicated facilities becoming idle,” Patel said in the 19 April letter to Roy. (For details log on to : http://www.livemint.com/2012/05/04212541/Patel-bats-for-Bhel-wants-rai.html?atype=tp)
GOVERNMENT DEFENDS DECLINE IN OIL OUTPUT BY IMPERIAL ENERGY
NEW DELHI: The government has defended the steep fall in oil output by Imperial Energy, which ONGC acquired for $2.1 billion three years ago, and blamed geological complexity for the situation, ironically putting forth an argument similar to what Reliance Industries said to explain the drop in D6 gas production. Imperial’s Russian assets produced about 15,400 barrels per day (bpd) at end of last year, significantly less than the target of 80,000 bpd set by ONGC Videsh, when it made the costly acquisition. The Comptroller and Auditor General (CAG) criticized ONGC in a report last year, and said the falling output resulted in a loss of 1,182.14 crore for ONGC. Oil secretary GC Chaturvedi recently told Parliament’s standing committee that Imperial Energy’s output fell because of unexpected geology and difficult terrain. He said the block was evaluated before ONGC acquired it but “the assessment about the production has not lived up to the expectation. So far as the reserves are concerned, they are there.” “The reserves, which they had anticipated, I believe, they have got it verified by some external consultant also. The reserves are there. But the problem is arising in bringing those reserves out,” the report said quoting Chaturvedi. (For details log on to : http://economictimes.indiatimes.com/news/news-by-industry/energy/oil-gas/government-defends-decline-in-oil-output-by-imperial-energy/articleshow/13002174.cms)
PUNJAB TO GIVE PROMISED INCENTIVES TO HMEL’S BATHINDA REFINERY
CHANDIGARH: With the USD 4 billion Bathinda oil refinery getting commissioned, fund-starved Punjab government will now give incentives, which were promised by it for the setting up of the ambitious 9 million tonne per annum project. An Empowered Committee headed by Punjab Chief Minister Parkash Singh Badal is likely to give approval in a meeting to be held on May 10 to the promised incentives, a senior official of Punjab Industries Department told PTI today. “After the approval by the Empowered Committee, the case will be sent to Finance Department for the release of money,” he said. As per the Deed of Assurance signed on August 12, 2005 between Punjab Government, HPCL and HPCL-Mittal Energy Limited (HMEL), the state government had agreed to grant interest free loan of Rs 250 crore per annum for the first five years amounting to Rs 1,250 crore at the end of each beginning from the date of commercial production. (For details log on to : http://economictimes.indiatimes.com/news/news-by-industry/energy/oil-gas/punjab-to-give-promised-incentives-to-bathinda-refinery/articleshow/12997850.cms)
NO SOLUTION IN SIGHT FOR RELIANCE-MINISTRY ROW
NEW DELHI: An amicable solution between Reliance Industries Ltd (RIL) and Petroleum Ministry on the dispute regarding cost recovery from the D6 block seems unlikely. A senior Petroleum Ministry official said that the notice served to RIL on Wednesday, disallowing about $1 billion as cost recoveries for 2010-11 and 2011-12 in the East Coast gas fields, was based on recommendations from the highest legal authorities. RIL has been held responsible for violation of its committed work programme under the production sharing contract (PSC). The official termed the Petroleum Ministry’s decision as ‘cautious and conservative’. When the output from the producing gas fields started seeing a steep decline, the Ministry had asked the Solicitor General and others about the course of action, the official said. The Solicitor-General had advised that the least the Ministry could do was to serve a notice disallowing cost recovery for the period. (For details log on to : http://www.thehindubusinessline.com/todays-paper/tp-corporate/article3385104.ece)
REAL ESTATE REGULATORY BILL LIKELY IN NEXT PARLIAMENT SESSION
The Real Estate Regulatory Bill is likely to be presented in the next session of Parliament. The Bill is expected to be tabled before the Union Cabinet shortly, said Ms Aruna Sundararajan, Joint Secretary, Union Ministry of Housing and Urban Poverty Alleviation. Addressing ‘Estate South 2012: Accelerating Growth’, a conference on real estate industry organised by the Confederation of Indian Industry (CII), she said the Bill was drafted taking into consideration most of the industry proposals, she said. The Bill will basically mandate certain public disclosure norms and establish a level playing field, she added. Besides, she said the new “market-friendly” Rental Bill too has been circulated to the State Governments. While the Central legislation would only be a model Act, State Governments would be the real enactors, she said. Readingout the speech of Mr Deepak Parekh, Chairman, HDFC Ltd, the company’s CEO, Mr G. Krishnamurthy, said the long-term prospects of the real estate industry in Indiawere bright owing to increasing population and rapid urbanisation. (For details log on to : http://www.thehindubusinessline.com/todays-paper/tp-economy/article3385120.ece)
BULK POWER OPEN ACCESS NOW, STATES TOLD
NEW DELHI: Armed with the attorney-general\’s opinion that the Electricity Act makes it obligatory for power distribution companies (discoms) and bulk consumers to sign agreements for electricity purchase, the Centre has directed all states to institute mandatory open access regimes in distribution. The toughening of stand comes after similar missives to state electricity regulatory commissions last November fell on deaf ears. Official sources said the Union power ministry recently wrote to state governments, asking them to issue directives to respective state regulators to frame regulations to ensure bulk consumers (those with load of above 1 MW ) meet their electricity requirement through the open access route only. “When the attorney-general has given a legal opinion, no regulator can says its interpretation is different,” Union power secretary P Uma Shankar told FE. Open access is seen as a prerequisite for promoting free market and competition in power retailing. It means a discom should allow consumers access to its distribution network for wheeling power from outside. The Electricity Act 2003 stipulates that discoms must allow open access to such bulk power consumers from January 2009. However, the attorney general clarified last November that open access is not optional but mandatory for bulk power. (For details log on to : http://www.financialexpress.com/news/bulk-power-open-access-now-states-told/945529/)
VEDANTA’S RS 1,000-CRORE ODISHA INVESTMENT STUCK
NEW DELHI: The fate of the Rs 1,000-crore investment made by Vedanta Aluminium Ltd (VAL) in setting up a power plant in Odisha is hanging in balance. A high-level inter-ministerial committee that recommends coal allocation for power units has refused to take up the vexed issue of linkage for VAL’s plant in view of the legal nature of the matter. VAL, which is a unit of London-listed Vedanta Resources Plc, had earlier asked the committee to renew a letter of assurance (LoA) for supply of coal to the 270-Mw capacity plant by Coal Indiasubsidiary Mahanadi Coalfields Ltd (MCL). This, after an LoA had lapsed when VAL failed to achieve project milestones. “The standing linkage committee has noted the developments in this case,” according to an official close to the development. “It has decided that it is a legal matter — one that cannot be opined upon by the committee,” he told Business Standard. A senior VAL executive refused to comment. It was in 2008 that the Vedanta subsidiary was issued an LoA by MCL for supply to four units of 135-Mw capacity each – of its captive power plant in Jharsuguda district in Odisha. The power from the plant was to be fed to a 0.5-mtpa (million tonne per annum) alumina smelter of Vedanta at the same site. LoAs generally get converted to firm fuel supply agreements (FSA) after the project developer achieves certain milestones within a timeframe. (For details log on to : http://www.business-standard.com/india/news/vedantas-rs-1000-cr-odisha-investment-stuck/473480/)
VOLUME GROWTH CONTINUES IN FMCG
MUMBAI: Fast moving consumer goods (FMCG) companies appeared to have sustained their sales momentum in the quarter ended March 31, at a time when inflationary pressures were high. Companies that have declared their results till date for the quarter report double-digit top-line growth, from 13 per cent (Nestle) to 39 per cent (Procter & Gamble Hygiene and Healthcare). Barring Nestle and Marico, most other companies have seen bottom line growth between 15 and 35 per cent during the quarter, data compiled by the Business Standard Research Bureau shows. While the numbers are in line with market estimates, analysts were cautious owing to the general trend of consumers cutting back during inflationary times. Abneesh Roy, associate director, research, Edelweiss, says, “Categories such as soups, high-end edible oils and noodles are showing signs of a slowdown. These are discretionary items which consumers tend to cut on when pressure on their wallets grows.” (For details log on to : http://www.business-standard.com/india/news/volume-growth-continues-in-fmcg/473470/)
GUAR PRICE-RIG REPORT NAMES RUCHI SOYA, BETUL
MUMBAI: The Forward Markets Commission (FMC) has found 4,490 entities were involved in guar gum price manipulation. In a report submitted to the ministry of consumer affairs (MCA) on Friday, the commodity market regulator has said these entities made profits of Rs 1,291 crore by way of price manipulation. The report also names listed entities Ruchi Soya and Betul Oil. The report is significant as many traders had earlier said the price of guar gum had risen abnormally because of a shortage. However, the commodity was cornered through other channels, including margin funding and booking of huge stocks under various fake names, as was divulged by the FMC earlier. Confirming the receipt of the report, Rajiv Agarwal, secretary, MCA, said, “We are examining the issue. We would take appropriate action in future.” While Ruchi Soya’s managing director Dinesh Shahra did not respond to calls by Business Standard, Betul Oil’s spokesperson said, “We are trading in various commodities in the physical as well as futures markets as the routine course of operations. We have complied with all the extant rules, regulations and provisions governing the markets and any directives issued by the exchanges and/or the Forward Markets Commission from time to time.” (For details log on to : http://www.business-standard.com/india/news/guar-price-rig-report-names-ruchi-soya-betul/473460/)
SMALLER CITIES MAY FIND PLACE IN AIR MAP
NEW DELHI: The civil aviation ministry plans to auction air routes which connect smaller cities to boost regional connectivity. Routes and airlines will be matched through competitive bidding. “We plan to call an auction to select an operator for a particular route and the company that bids for lowest subsidy gets the route,” said a senior civil aviation ministry official, who did not want to be identified. “Talks are on with the planning commission, which is in favour of the proposal.” A fund, Essential Air Services Fund or EASF, will be created for paying the subsidy. “The routes to be selected will be loss-making routes connecting smaller cities with lower passenger loads and airlines are averse to operating such routes because of low traffic. Basically, the plan is to provide connectivity to these cities through smaller planes,” the official said. (For details log on to : http://www.business-standard.com/india/news/smaller-cities-may-find-place-in-air-map/473478/)
ADIDAS CEO LIKELY TO VISIT INDIA AMID CRISIS
MUMBAI: Adidas chief executive officer Herbert Hainer is expected to be in Indiasoon, as the local unit of the German sportswear maker, Reebok India, finds itself embroiled in a controversy, following the exit of its senior management, including Adidas Indiamanaging director Subhinder Singh Prem, amid allegations of commercial irregularities. Prem was given a termination notice by e-mail on April 29, a month after he sent in his resignation. Earlier this week, Adidas admitted to commercial irregularities at Reebok India, saying it could result in a pre-tax impact of up to euro 125 million (or Rs 871 crore), while further restructuring there could cost up to euro 70 million (Rs 488 crore) in 2012. It said it would cut the number of its nearly 1,000 Reebok stores in Indiaby about a third. Hainer is said to have sought appointment with senior ministers, following the survey of Reebok India’s accounts by tax authorities yesterday. (For details log on to : http://www.business-standard.com/india/news/adidas-ceo-likely-to-visit-india-amid-crisis/473481/)
SOON, SIP A CUP OF FILTER COFFEE AT CCD OUTLETS
MUMBAI: Mumbaikars would soon get to have the famed ‘filter coffee’ at branded outlets. Coffee Day Fresh & Ground, a division of India’s largest coffee conglomerate Amalgamated Bean Coffee Trading Company (ABCTCL), which owns the Cafe Coffee Day chain of shops, will now roll out coffee kiosks and Kaapi Guru machines serving filter coffee outside the four south Indian states where it has been operational since 1996. Fresh n’ Ground, which is the market leader in the organised roast & ground filter coffee segment with 425 exclusive outlets in Karnataka, Tamil Nadu, Andhra Pradesh and Kerala, has launched its first coffee shop in Mumbai, in the neighbourhood of Matunga — the south Indian hub of the city. (For details log on to : http://www.financialexpress.com/news/soon-sip-a-cup-of-filter-coffee-at-ccd-outlets/945626/)
AMBIKA SONI SEEKS MEDIA SELF-REGULATION
NEW DELHI: Defending the mechanism of self-regulation for the Media, Information and Broadcasting minister Ambika Soni on Friday said that this slower but surer system only needed more time to establish itself. Soni was speaking at an event hosted by Assocham where Press Council Chairman Justice Markandey Katju had in his speech earlier heavily criticised the news media for not highlighting the real issues facing the country. ‘‘Rules and regulations for media, cable, television, the Censor Board which the Parliament in its wisdom has put in its place should be at least given an initial chance of self regulation’’, Soni said. Making a case for self regulation, she said when a person is given the responsibility of deciding whether he has done the right thing by showing one hour of superstition or other illogical things, somewhere down the line his conscious is going to prick. (For details log on to : http://www.financialexpress.com/news/ambika-soni-seeks-media-selfregulation/945495/)
9 INDIAN AMERICANS IN FORBES MIDAS 100
NEW YORK: Nine Indian Americans have made it to the list of 100 dealmakers with ‘‘Midas Touch’’ compiled by the Forbes Magazine. The Forbes list comprises of venture capitalists who had made investments in start-up companies and then sold off their stakes with handsome gains. Aneel Bhusri the co-CEO of Workday—a cloud-based financials and human resources software company was ranked 25th in the list. The list was topped by Jim Breyer of Accel Partners, who had bet $12.7 million on a Harvard drop-out with a social network (Facebook), a deal that turned into a ‘‘once-in-a- generation investment’’ Forbes said. With an 11% stake, Accel Partners, is Facebook’s second largest shareholder after Mark Zuckerberg. Breyer personally owns 1% in Facebook. (For details log on to : http://www.financialexpress.com/news/9-indian-americans-in-forbes-midas-100/945502/)
DHAKA TO PAY PREMIUM FOR ASSURED COTTON SUPPLY
NEW DELHI: New Delhiand Dhaka will soon ink a long-term supply contract wherein Indiawill supply an assured quantity of cotton to Bangladesh, but prices will be higher than that in the international market. Officials from the two countries are expected to meet soon to decide on the quantity and the marked up price. Bangladeshwants assured supply of at least 15 lakh bales (170 kg each) every year, but Indiais yet to decide how much it could comfortably part with. “Since the government would be taking on a commitment to supply a fixed quantity of cotton every year, it has to get something more than the prevailing prices in the global market. The two sides will decide on a fair mark-up percentage which will depend on the quantity that Indian commits,” the official added. (For details log on to : http://economictimes.indiatimes.com/news/economy/foreign-trade/dhaka-to-pay-premium-for-assured-cotton-supply/articleshow/13002472.cms)
POPULATION GROWTH RATE DIPS TO 17%; INDIA SEES 4% DECREASE FROM 21% IN 10 YEARS
NEW DELHI: Population has started to swell in Delhi’s suburbs. Gurgaon and Noida (Gautam Buddha Nagar) are among the top five places in Indiathat recorded the highest decadal growth rate in population. While Gurgaon recorded a 74% increase in population between 2001 and 2011, Noida saw a rise by almost 52%. Indiasaw a 17.6% increase in population over the decade. Kurung Kumey – a small district in Arunachal Pradesh bordering China- recorded the highest decadal increase in population at 111%, followed by Yanam in Puducherry (77.15%). North-eastern states like Meghalaya (27.82%) and Arunachal Pradesh (25.92%) recorded the highest increase in decadal population growth. (For details log on to : http://economictimes.indiatimes.com/news/politics/nation/population-growth-rate-dips-to-17-india-sees-4-decrease-from-21-in-10-years/articleshow/13005641.cms)
INDIAN BROADCASTING FEDERATION ASKS TRAI TO REVISIT CARRIAGE FEE REGULATION
NEW DELHI: The Indian Broadcasting Federation (IBF) has said that the carriage fees paid by TV channels has “crippled” various broadcasters, especially the smaller-sized companies, and said that there is an “urgent need” to revisit this issue, adding that it would “seek clarity” on this matter from the Telecom Regulatory Authority of India (TRAI). In a press release issued on Friday, IBF said payment for carriage fees is a “big area of concern” for broadcasters and it has “restricted their ability” to invest in content and other activities of a channel. Pointing out that broadcasters have taken up this issue in various discussions with the TRAI and the government in the past, it said that there is an urgent need to revisit this issue and it would seek clarity on this matter from TRAI. However, IBF welcomed the must carry clause whereby distributors have to enhance the channel carrying capacity to a minimum of 200 channels from 1st July, 2012 and 500 channels from 1st January, 2013. It also said that the tariff amendments and the new Interconnect regulations for Digital Addressable Cable brought about by TRAI would inject “necessary transparency” across the value chain. (For details log on to : http://economictimes.indiatimes.com/news/news-by-industry/media/entertainment-/media/indian-broadcasting-federation-asks-trai-to-revisit-carriage-fee-regulation/articleshow/13003768.cms)
TRAI’S SPECTRUM MORTGAGE PROPOSAL UNDER SCANNER
NEW DELHI: Ministries of telecom, finance and law must give their opinions on the Telecom Regulatory Authority of India’s proposal to allow operators to mortgage spectrum and borrow funds, said the apex DoT body. The Telecom Commission told Trai that presently a tripartite agreement between the licensor, the government, the licencee, the telecom operator, and the lender facilitates borrowing by the telco. “The prospects of mortgage of spectrum need to be examined legally as to the nature of property rights acquired by the licensee. This needs to be examined by ministry of law and Finance,” the Commission said. Trai had proposed that telecom companies may be allowed to mortgage spectrum to registered Indian financial institutions against borrowings. The regulator, however, added a condition that in the event of default of the liability, the financial institution may auction the airwaves under the supervision of DoT and all proceeds from the sale be remitted to the government. (For details log on to : http://economictimes.indiatimes.com/news/news-by-industry/telecom/trais-spectrum-mortgage-proposal-under-scanner/articleshow/13003677.cms)
SAMVARDHANA WITHDRAWS IPO
MUMBAI: Samvardhana Motherson Finance scrapped its initial public offering of shares to raise about R1,665 crore due to poor response amid souring foreign investor sentiment over uncertainty about a proposal to tax portfolio investments. The poor response to the offering, which would have been the biggest so far this year, is expected to dim the outlook for upcoming share sales including the central government’s plans to sell some of its shares in state-run companies. The Samvardhana IPO was covered only about 23%of the total book size by 5 pm on Friday, the last day of bidding, according to stock exchange data. It was launched on Wednesday. The response was mainly hit by worries about the General Anti-Avoidance Rule (GAAR). Foreign investors are not in a mood to commit money in the absence of any clarity on that, a source said. (For details log on to : http://www.financialexpress.com/news/samvardhana-withdraws-ipo/945560/)
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