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Anil Ambani

Anil Ambani, the Indian industrialist, was on a family holiday in a game park in South Africa earlier this month when the news came. Takeover talks had collapsed between rival billionaire entrepreneur Sunil Mittal, chairman of India’s biggest mobile carrier Bharti Airtel, and MTN, the South African wireless operator. Mr Ambani promptly switched from passively viewing the big game to hunting – going after one of the biggest emerging markets telecoms groups.

Last week, his mobile phone company, Reliance Communications, engaged MTN in exclusive talks for an audacious reverse takeover that would put him at the helm of a group with 115m subscribers across Africa, the Middle East and India. In some estimates the deal could be worth $20bn (£10bn, €13bn) – the largest overseas takeover tried by an Indian company.

People who know Mr Ambani, estimated by Forbes as the world’s sixth richest man with a net worth of about $42bn, say the deal is typical of his aggressive style. “He has an absolute killer instinct, he is competitive as hell,” says one industry insider from a rival company in India.

The deal, if he can pull it off, would offer a dramatic validation of his business skills, allaying any residual insecurities from the bitter public succession battle with his elder brother, Mukesh, after his father, Dhirubhai, died without a will in 2002. Dhirubhai started out as a petrol pump attendant and became legendary as the founder of one of India’s biggest private companies, Reliance Industries, an oil and petrochemicals group. He remains revered among Indian retail investors for his Midas touch, an Indian Warren Buffett.

Mr Ambani was born in Bombay in June 1959. He earned a bachelor of science degree from the University of Bombay and an MBA from the Wharton School of the University of Pennsylvania. He returned to India to join the family company and became co-chief executive officer in 1983, when he began to earn a reputation for financial innovation. Under their father, Mukesh was charged with project management while Anil took care of marketing and fundraising.

The eventual succession battle took seven months to resolve, when their mother brokered a deal. As part of the settlement in 2005, Anil received about 30 per cent of Reliance’s assets, principally its telecoms arm, now known as Reliance Communications, and its financial services and energy divisions.

Anil revered his father – he still starts press briefings with a floor-to-ceiling slide of Dhirubhai. “This is the first time he’s on his own, there’s no father or brother around to help. He’s very driven to prove things to himself rather than anything else,” says one person who has worked with both brothers.

Since 2005 he has pursued bold initiatives. These include India’s biggest initial public offering, the $3bn listing of Reliance Power, in January to a $1bn deal, announced this month, to make films with illustrious Hollywood groups from George Clooney’s Smokehouse Productions to Brad Pitt’s Plan B Entertainment. When he took over the group in 2005, its market capitalisation was about $5bn. Now it is $75bn.

The Bollywood connection is not just business. He is at ease in the vibrant social set and close friends with the family of Amitabh Bachchan, the Bollywood superstar. He is also married to Tina Munim, a former Bollywood actress, with whom he has two children.

The family lives in south Mumbai in one part of an apartment block he shares with Mukesh, (the latter is, however, building a $2bn, 27-storey home, which could erase fears of ever invading each other’s personal space). The two estranged brothers work different hours, so rarely meet in the elevator. Anil arrives at work by helicopter at his business park by 9.30am and returns about 12 hours later. Mukesh starts at midday and finishes by midnight.

Anil is a devout Hindu and never drinks or smokes. Although described as “a health freak”, he likes his food spicy hot, so much so that one person remarked he has food with his chilli, not vice versa. After being teased about his weight, he took up marathon running and often runs 100km a week. He has become a familiar sight in his Wharton T-shirt running a 15 km loop along Marine Drive, the half-moon boulevard that defines south Mumbai’s seafront. “He runs on a treadmill at a speed of some 14km per hour and on the streets of Bombay at a speed of 12km per hour, so frankly, he’s a man in a hurry,” says the person who knows the brothers.

He is not immune to the allure of fast cars. He was a fan of Porches and Lamborghinis, but today prefers his Range Rover, more practical for Mumbai’s pot-holed roads. He retains a love of driving and asks his chauffeur to move aside and sit in the passenger seat whenever he has time to take the wheel.

For all the blistering corporate activity, Anil’s critics argue that he has yet to prove he can build businesses as well as his brother Mukesh, who some see as a genius at executing large projects, compared with Anil who is better known as a gifted and articulate presenter. “He has an unbelievable grasp of facts and numbers, he’s something of a financial genius and a genius at understanding capital markets”, said one executive from a rival company. “What he is lacking is the ability to put strong people around him whom he will give rope to, so as a result, he hasn’t attracted as high quality a team around him as his brother has.”

Anil’s competitors also charge him with being too close to regulators, with his businesses benefting from regulatory loopholes, such as in building his mobile network. He has strong political ties and was elected in 2004 as an independent member of the Rajya Sabha, Upper House, in June 2004. He resigned in 2006.

Moreover, not everything has gone right. Reliance Power, after its blockbuster IPO in January, plummeted 17 per cent on its trading debut the following month amid the credit crisis. Worried that the fall could damage Reliance’s reputation for always rewarding shareholders, Mr Ambani compensated them by issuing them with free shares.

The IPO also revealed continued tensions with his brother. Some joked they were competing to top the Forbes billionaires list. Mukesh finished one notch higher, at number five with $43bn. This could change if Anil secures MTN (he would be the first brother to make a big overseas acquisition). So far this is sibling rivalry that has proved constructive and productive; but Mr Ambani still needs to prove he can catch his hunted quarry.

Wide protests as fuel prices rise

India’s Congress party-led government increased prices at the nation’s fuel pumps on Wednesday, prompting a backlash from rival parties and threats of street protests.

The government raised retail prices of petrol, diesel and liquid petroleum gas by 8-17 per cent to reduce the burden of fuel subsidies expected to jump to $57.8bn this year – more than 3 per cent of gross domestic product.

India joins a host of Asian countries that have been forced to take the same politically unpopular step in recent days following a near doubling of global oil prices over the past 12 months to more than $130 per barrel.

Malaysia announced a 41 per cent price increase on Wednesday to reduce a subsidy burden estimated at $17bn this year while Indonesia raised prices by 29 cent last month and Sri Lanka by 14-47 per cent.

In a televised address on Wednesday night, Manmohan Singh, Indian prime minister, urged citizens to conserve fuel, saying the price rises were “inevitable” to relieve pressure on the state-run oil companies that have shouldered the burden of the oil price surge with the help of government bonds.

“I know that the price increases we have had to announce today will not be popular, even though they are only modest,” Mr Singh said.

India, which imports more than 70 per cent of its oil needs, has been under pressure to increase fuel prices for months.

But with inflation breaching 8 per cent in recent weeks, well beyond the central bank’s 5.5 per cent comfort zone, the government has delayed the move.

With an election due in less than a year, the Congress party-led United Progressive Alliance coalition government fears inflation will hurt the nation’s hundreds of millions of poor.

The government left the price of kerosene, the most important fuel for the poor, unchanged.

Crisil, a rating agency, estimated the price rises would cause an increase in inflation of nearly 1 per cent.

Economists described the latest price rises, which will reduce the subsidy by less than 10 per cent, as too small to be anything other than a “band-aid” measure.

“You’re not tackling the problem, you’re dealing with the symptoms,” said Rajeev Malik, economist with JP Morgan.

India’s leftist parties, on which the United Progressive Alliance coalition depends for its parliamentary majority, vowed to stage national protests.

Raising oil prices will have a “cascading effect and heap further burdens on the people”, said the Communist Party of India (Marxist), calling for a windfall tax on oil company profits.

The opposition Bharatiya Janata party, which has been gaining momentum in recent state elections, joined the attack.

“The prime minister, who has been hiding behind the growth rate for last four years, has completely ruined the economy,” said Rajiv Pratap Rudy, BJP national spokesperson.

Copyright The Financial Times Limited 2008

IPO : First Winner Industries Ltd

First Winner Industries Ltd
Regitered Office : 605 Business Classic, Chincholi Bunder Rd Malad(West, Mumbai - 400064, Maharashtra, India

Phone : 91-22-28802255/99 Fax : 91-22-28812288
Email : ipo@firstwinnerind.com Website : www.firstwinnerind.com

Public issue of 55,00,000 equity shares of rs.10/- each for cash at a price of Rs.[*] per Equity share aggregating to Rs.[*] Crores (hereinafter referred to as "the issue"), comprising of employee reservation of 1,00,000 equity shares of face value of Rs. 10/- each at a price of Rs.[*] per equity share for cash aggregating to Rs.[*] Crores (herein after referred to as the "employee reservation portion". The net issue to the public is of 54,00,000 equity shares of Rs. 10/- each for cash at a price of Rs. [*] per equity share aggregating to Rs.[*] Crores. The issue would constitute 31.02% of the post issue paid-up capital of the company Price band: Rs.120/- to Rs.130/-per equity share of face value of Rs. 10/- each The issue price is 12 times the face value at the lower end of the price band and 13 times the face value at the higher end of the price band

Bid		Book Built Portion		Fixed Price Portion		Money payable on
Opens on	Closes on	Opens on	Closes on	Opens on	Closes on	Application
Jun 9, 2008	Jun 12, 2008	Jun 9, 2008	Jun 12, 2008	Jun 9, 2008	Jun 12, 2008	Rs. 120.00-130.00
Minimum Application for shares in Nos (Book built portion) :50 Minimum Application for shares in Nos (Fixed price portion) :50 Further muliples of :50

	Rs cr	Book Running Lead Manager to the offer
Project Cost	0.00	Almondz Global Securities Ltd
Project financed through current issue	66.00	-
Post Issue Equity share capital	17.73	Lead Manager to the offer
Issue Price	Rs. 120.00	NA

Object of the issue : Setting up of an Apparel Manufacturing Facility, Setting up of new Weaving Unit, Prepayment of Term Loan, General Corporate Purposes.

Promoted by	Listing at	Registrar to the Issue
Rinku Patodia Anita Patodia	BSE NSE	-

Market snaps three day losing streak; IT stock surge

Market snaps three day losing streak; IT stock surge

Frenzied buying coupled with short covering after three straight day's of fall triggered a solid spurt in late trade. Reports of Prime Minister's resignation had spooked a sell-off in mid-morning trade. Despite the rally, the market breadth remained negative. The market witnessed choppy swings throughtout the day. Global cues were mixed. Earlier today, the market saw firm start despite weak global cues, but slipped in red shortly on fresh selling. The market breadth was weak. Shares from oil, realty, declined while those from IT, FMCG and power rallied. The 30-share BSE Sensex ended up 250.59 points or 1.62% at 15,765.38 as per provisional figures. Sensex gained 300.01 points at its high of 15814.80 touched during late trade. It lost 200.72 points at day's low of 15,314.02, touched in mid-morning trade. The broader based S&P CNX Nifty was up 84.85 points or 1.85% to 4,670.45 as per provisional figures. The market breadth was negative on BSE with 1235 shares advancing as compared to 1404 that declined. 72 remained unchanged. The BSE Mid-Cap index rose 0.04% to 6399.81 and BSE Small-Cap index rose 0.29% to 7,742.61. Both these indices underperformed the Sensex. Among the 30-member Sensex pack, 23 advanced while the rest gained. BSE clocked a turnover of Rs 5578 crore today as compared to a turnover of Rs 6461.80 crore on 4 June 2008. IT stocks surged as the Indian rupee weakened further against the US dollar. Wipro (up 6.25% to Rs 528.40), Infosys (up 5.85% to Rs 1979.70), Satyam Computer Services (up 5.47% to Rs 512.20) and TCS (up 2.57% to Rs 982.75) edged higher. Power stocks advanced on fresh buying. Tata Power Company (up 7.79% to Rs 1256.65), NTPC (up 5.57% to Rs 166.65), Reliance Infrastructure (up 5.68% to Rs 1130.85) edged higher. Shares of upstream companies rallied after the subsidy burden that they have to bear became clear post fuel price hike announced yesterday, 4 June 2008, which had remained uncertain until now. Oil and Natural Gas Corporation soared 7.46% to Rs 953.20 and Gail India jumped 7.39% to Rs 398.30. Upstream oil companies ONGC and GAIL India absorb most of subsidy burden arising in the form of under-recoveries of oil marketing companies. The duo will now have to bear Rs 45,000 crore in subsidy burden, which is at historically high levels. However the public sector oil-marketing companies extended losses today after yesterday’s fuel price hike. HPCL (down 6.26% to Rs 226.30), Indian Oil Corporation (down 6.29% to Rs 391.90) and BPCL (down 7.01% to Rs 301.35) edged lower. FMCG stocks rose. Tata Tea (up 5.02% to Rs 816.30), Hindustan Unilever (up 3.23% to Rs 237.85), ITC (up 2.89% to Rs 222.35) edged higher. Jaiprakash Associates (up 3.68% to Rs 205.60), Grasim Industries (up 3.19% to Rs 2,246.30), Tata Steel (up 3.1% to Rs 840.90), ICICI Bank (up 3.09% to Rs 781.25), HDFC Bank (up 2.22% to Rs 1,243), were the top gainers from Sensex pack. Tata Motors (down 1.82% to Rs 532.60), Larsen & Toubro (down 1.6% to Rs 2,721.20), Ambuja Cements (down 1.89% to Rs 85.85), Reliance Industries (down 2.58% to Rs 2247.65), were the top losers from Sensex pack. Interest rate sensitive realty sector declined on fears of hike in interest rates or CRR after inflation may rally to double-digit post fuel price hike announced yesterday, 4 June 2008. Indiabulls Real Estate (down 1.6% to Rs 405.45), Phoenix Mills (down 3.99% to Rs 319) and DLF (down 3 % to Rs 538.45) edged lower from realty pack. India’s largest maker of utility vehicles, Mahindra and Mahindra (M&M) declined 0.92% to Rs 562.75. It announced signing an agreement to acquire 100% stake in Italy based Engines Engineering. Engines Engineering is in the business of two wheels design and developing of motorcycle prototype. India’s second largest telecom services provider Reliance Communications rose 1.3% to Rs 547.15. As per reports Reliance Communications and South Africa's MTN have begun due diligence as they inch closer to creating a global top-10 telecoms firm. Reliance Communications has also engaged Deutsche Bank for the possibility of roping in private equity firms for part of the deal, the source said. Blackstone Group Carlyle Group and Apax were interested to put in $4 billion to $5 billion, reports added. India’s largest cement maker by sales ACC rose 1.09% to Rs 639.70. Its cement shipments in May 2008 fell to 1.8 million tonnes from 1.82 million tonnes a year earlier. Production fell to 1.79 million tonnes from 1.82 million tonnes during the similar period. In a crucial development, government yesterday, 4 June 2008 agreed to raise its petrol and diesel prices by about 10% in an attempt to curb mounting losses of state-owned refiners thereby stoking inflation and risking a political backlash. After 10 days of debate over the price increase, the Cabinet also agreed to cut the import duty on crude oil to support state run refining and retailing firms. Customs duty on crude was also reduced to nil from 5%. The duty cuts would amount to Rs 22,660 crore in revenue loss, the Revenue Secretary said. Meanwhile, the ruling Left Front in West Bengal has called a 12-hour general strike today, 5 June 2008 in protest against the 'anti-people' decision of the Centre to raise the prices of petrol, diesel and cooking gas. Analysts opine that higher inflationary expectations immediately gave rise to fears of a cash reserve ratio (CRR) or interest rate hike, which is a negative for markets. European markets were trading mixed. Key benchmark indices from Frrance, and UK were down between 0.01% to 0.17%. While Germany’s DAX rose 0.24%. Asian markets were mixed today, 5 June 2008. Japan's Nikkei Singapore's Straits Times, South Korea's Seoul Composite, and China's Shanghai Composite, were down by between 0.08% to 0.65%. Hong Kong's Hang Seng and Taiwan's Taiwan Weighted were up between 0.55% to 1.28%. US markets ended mixed in volatile session yesterday, 4 June 2008. Banks fell to their lowest level in eight years on Fed Chairman Ben Bernanke's warning that inflation is still a concern. Financials tumbled on rumors that Moody's May Put bond insurers AMBAC and MBIA on review for a possible credit rating downgrade. The Dow Jones industrial average slipped 12.37 points, or 0.10%, to 12,390.48. The Standard & Poor's 500 index was down 0.45 points, or 0.03%, to 1,377.20, while the Nasdaq advanced 22.66 points, or 0.91%, to 2,503.14.

Source: Capital Market

JPM, ICICI Ventures to invest Rs 60 cr each in PVR Pictures

Excerpts from CNBC-TV18’s exclusive interview with Sanjeev Kumar Bijli:

Q: What is the exact amount of money that you will have raised with this increased shareholding?

A: We have raised Rs 120 crore. It is Rs 60 crore each from both investors - ICICI and JP Morgan.

Q: ICICI Ventures already has a shareholding in your company. What would be the new stake that they would have? What would be the shareholding?

A: They actually had come in into PVR Limited earlier. But post the IPO, they had divested most of the investment. So, in PVR Pictures, which is a subsidiary, they have come in at about 20% now.

Q: What is the key use of the Rs 120 crore?

A: Since this is coming into PVR Pictures, we are going to be looking at deploying these funds into film production and distribution. We have had a good start with Taare Zameen Par and have got another film coming up in July. So, this is purely for content.

Q: If I get you right, it has come to a subsidiary, PVR Pictures, is it?

A: That is right.

Q: Will you be looking for more support in terms of selling shares and raising money?

A: No. This is it for now. Obviously, this will see us through for a number of years. We are hoping that we will be able to deploy them and get some good films going.

Q: At this point, what is PVR’s holding in PVR Pictures?

A: 60%.

Q: That obviously would have gone down after this increase in capital from outsiders?

A: Now, it has gone down to 60% with the capital infusion.

Q: Are there any moves to raise money in the parent company, PVR as well?

A: No, not right now. Not as of now. We have had a healthy year, and with internal accruals and the IPO funds we raised earlier, we are pretty much on track right now.

Q: What is the number of shares you have issued to these two shareholders? What is the price they have paid per share?

A: I don’t have the details right now, because we have just signed it only yesterday. A lot of the paperwork is still being done. I am sure we will announce everything once that is done with.

Q: What is the dilution? How many new shares have you issued?

A: We have diluted 40%.