Idea Cellular files red herring prospectus; to raise Rs2,500-cr
New Delhi: AV Birla group company Idea Cellular, has filed its draft red herring prospectus with the Securities and Exchange Board of India for a proposed initial public offer through a 100 per cent book-building process aggregating Rs2,500 crore.

The company proposes to reserve equity shares amounting to Rs50 crore for allotment to eligible employees of the company with the balance of Rs2,450 crore to be available for allotment to public. The company proposes a greenshoe option not exceeding Rs375 crore in excess of the equity shares that are included in the issue of Rs2,500 crore.
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Reliance broking arm suspended for 4 months
Kolkata: The Securities and Exchange Board of India has suspended Reliance Share and Stock Broking (RSSB), a member of the BSE, the NSE, the CSE and others for four months for violations of brokers' regulations. The alleged violations took place before April of 1999 when the company was a wholly owned subsidiary of Reliance Capital, the order mentioned. Now, the broking firm is part of the Anil Dhirubhai Ambani group.

T.C. Nair, the Whole Time Member of SEBI, said the suspension of certificate of registration of RSSB would take effect within the next 21 days.

This leaves ample room for an appeal against the directive.

The SEBI order said that the stock broking firm was found guilty of "some serious violations such as artificial pricing of trades, omission in mentioning relevant entries in contract notes, conversion of own trades to client trades, omission in mentioning of client ID for execution of trades, consolidation of client orders, (and) unfair trade practices in violation of Regulation of 6 (b) of PFUTP Regulations".
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Heidelberg to appeal against SEBI order
Mumbai: German cement major Heidelberg Cement plans to appeal before the Securities Appellate Tribunal (SAT) against SEBI's directive to increase the price of its open offer for the shareholders of Mysore Cement to Rs72.50 a share, as against Rs58 per share.

The open offer was triggered after Heidelberg acquired a majority stake in Mysore Cements from its promoters, the S.K. Birla group. Priced at Rs58 a share, the public offer was supposed to open on September 6 and close on September 25. The deal allowed the promoters to get Rs72.50 a share, which was 25 per cent higher than the price of the open offer on account of non-compete fees, an arrangement that did not find merit with SEBI.

SEBI had issued its observations stating: " ... ... ... the payment of non-compete fee to the selling promoters does not appear to be justified and thus you are advised to revise the offer price after including the payment of non-compete fee (per share) in the negotiated price (per share), as the negotiated price is highest among all the parameters under Regulation 20. Accordingly, suitably carry out the consequential changes in the letter of offer."
Heidelberg took management control of Mysore Cements by subscribing to the preferential offer and placed its representatives.
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MindTree to float IPO
Bangalore: MindTree Consulting has filed its Draft Red Herring Prospectus with Securities and Exchange Board of India (SEBI) to enter the capital market with an initial public offering of equity shares. MindTree proposes to offer 55,93, 300 equity shares of Rs 10 each in the proposed public issue.

The issue comprises a net issue of 49,40,740 equity shares of Rs10 each to the public and up to 3,72,900 equity shares of Rs10 each will be reserved for subscription by eligible employees and up to 2,79,660 equity shares of Rs10 each will be reserved for subscription by business associates, said a company press release.

The issue will constitute 15 per cent of the post-issue capital of the company and the net issue will constitute 13.25 per cent of the post-issue capital of the company.

Of the net issue, 60 per cent is being reserved for allotment to qualified institutional buyers, of which 5 per cent will be reserved for allotment to mutual funds. A further up to 10 per cent will be allotted to non-institutional investors and the balance up to 30 per cent will be allotted to retail investors.
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PFC files prospectus with SEBI
New Delhi: Power Finance Corporation (PFC) has filed its prospectus with market regulator SEBI for its initial public offering on Monday. The State-run lending agency submitted its draft red herring prospectus for an IPO up to 11.73 crore equity shares, representing 10.22 per cent of the post-issue share capital. The IPO is likely to hit the market around January 15-20 and the company could raise about Rs1,000-1,200 crore, sources said. PFC has reserved up to 25 lakh equity shares for its employees and the net issue to public is 11.48 crore shares.
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Cairn IPO subscribed 1.31 times
Mumbai: The IPO of Cairn India was subscribed 1.31 times at the close of the first day of opening.

The IPO of 32.8799 crore shares attracted bids for 42.9427 crore shares with the maximum bids at the upper price band of Rs190 per share.

Bids for around 7.4 lakh shares were made at the cut-off price.

The Cairn IPO had received bids for 17.6870 crore shares on the NSE as against the total issue size of 32.88 crore shares.

The maximum bids were made at the higher end of the price band, i.e. 17.6866 crore shares for Rs190 per share.
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RBI lists out derivative deal norms
Mumbai: The Reserve Bank of India (RBI) has issued draft guidelines for banks and primary dealers on derivative transactions. The guidelines say that every transaction should be marked to market or valued at the current market price, in order to demonstrate the valuation of these products.

Structured products should not contain any derivatives, especially second order products. Second order products are derivatives worked out on other derivative products and not on underlying financial products. The second order derivatives banned by the RBI are swaption, option on future, compound option, etc. The marked to market derivative deals need to be cash settled and management of derivatives should be an integral part of the overall risk management policy of a bank.

A bank or any other entity regulated by the bank should not undertake a derivative transaction which offsets the risk of its own subsidiaries, branches or group entities. Moreover, banks will have to maintain a cash margin, collateral in respect of the market to market valuation.

While directives on rupee derivatives remain the same as regards products, users and market makers, the regulator has come out with changes in foreign currency derivatives.

Banks and corporates (importers and exporters with foreign exchange receivable and payable) are allowed to sell covered call and put options in both foreign currency, rupee and cross currency and they can also receive premia.
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