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MC Insider: The infra baron who wants it all, IPO whispers, deal alert, stock manoeuvres and more

Last Updated: August 31, 2020 / 09:52 AM IST

GRIM (ASSETS) REAPER

GRIM (ASSETS) REAPER


A billionaire with big-time political clout is going all out to seize all the prized infrastructure assets of the country. In his relentless pursuit to grab the core possessions of air, land and water, he has rubbed many people the wrong way. A raft of complaints has been shot off to the highest powers that be in the country, but to no avail. Our infra baron’s latest gambit is to choke this suave, but debt-burdened scion and take control of his crown jewel — an airport. That’s not all. The bigger plan is to separately buy out a tainted financial services company that has financed the valuable land project around the airport. The land bank is worth its weight in gold. While all this is playing out, guess who’s playing matchmaker—a lending behemoth. Foreign investors have not taken kindly to these shenanigans though. Get set for a fierce legal battle.

OFS TO A BAD START

OFS TO A BAD START


Shares of a recently listed Japanese agrochemicals player, which also floated an offer for sale (OFS) in end-June, are being aggressively accumulated by India’s most famous high net worth individual. The institutional OFS itself had very heavy bids from a domestic fund, which was extremely unhappy with the paltry allotment it got. The sharp selloff on the stock is now an undisguised blessing for the HNI, who has huge business interests in India’s retail industry. Delivery patterns and higher trading volumes point to heavy hoarding of this stock. Moreover, the Japanese crop care company has to float another OFS shortly to meet minimum public shareholding norms. A look at its rivals’ stock prices will give an indication where the Japanese stock could be headed.

BEHEMOTHS IN ARMS

BEHEMOTHS IN ARMS


Last week, we told you about a legendary market player with retail interests buying one crore shares of a behemoth in the unlisted segment. This behemoth is heading for an eagerly awaited IPO and we heard whispers that its DRHP will be filed with the market regulator next month. Expect a blockbuster listing in early 2021. We asked our sources: what about the all-important benchmark pricing? Enter another behemoth, one, which has pulled of many a rescue act for the government in the past. This financial services giant is keen to strengthen its balance sheet and may monetise one crore shares in the IPO-bound entity after the DRHP filing. The ideal win-win formula, eh?

SIGHS AND LOWS

SIGHS AND LOWS

The feud between promoters of this ‘high-flying’ company, which shares its name with a species of plant from the bean family, is well known. We’ve seen it all—ugly war of words, regulators dragged in and lots of lawyering up. The company recently unveiled plans to raise capital to ease the pain of operations hobbled due to COVID-19. We heard advisors came on board. But what followed next was weeks of mysterious silence. The buzz is that there might a be a re-think on the equity fundraising route. So is a plan B being considered to raise the moolah? Is it because the share price hasn’t really taken off to desired levels? Is this linked with the not so friendly promoters again? The answer, my friends, is blowing high in the air.

DEAL ALERT

DEAL ALERT


This housing finance entity is pumped up to raise funds and bolster its balance sheet. If talks with bulge-bracket PE funds and a QIP were not enough, we now hear that it’s in the final stages of a minority stake sale in an overseas firm that lends to small and medium enterprises. A similar stake sale in the same firm had been announced a few years ago. The overseas firm in question, a fintech player, is backed by an Asian investment giant that is plotting a comeback after the virus wreaked havoc on its portfolio. The deal should be announced in a matter of weeks. Remember you heard it here first!

NEAT TRICK

NEAT TRICK


Online education and edutech firms are the flavour of the season. No surprise then that market operators are busy trying to spin a story around this firm that pioneered this business in India. Earlier this month, the Massachusetts Institute of Technology (MIIT) raised its stake in the company. Soon after, volumes in the stock began steadily rising. The price too is inching up. Despite its legacy, fund managers and HNIs have never fallen over each other to buy this stock. One Dalal Street heavyweight had a brief affair with the stock way back in 2001, but that ended in a heartbreak in less than a year. The dotcom boom had gone bust. Yet, this reputed—and outspoken—investor chose to publicly back this stock and even spoke of it as the next big thing in IT. Imagine his shock when he found that the promoters had pared their holdings in one particular quarter after a dull financial performance. Wonder what he would he have to say about the turn of events.

HOT SEAT

HOT SEAT

We heard a mid-sized bank led by a colourful banker recently ran into a brawl with an incoming A-list private equity investor. Their bone of contention? A board seat. The deal was held up for two weeks when the bank’s founders and leadership asked the investor to relinquish the board seat. The bank sent missives to other investors for getting a favourable vote, but they rallied behind the PE investor, which stood its ground. Finally, the bank caved in because it was in dire need of capital. The deal was sealed but the whole episode has left a bitter taste in the mouth of the investor who came in to provide confidence capital to the bank.

THANK GOD FOR IPL

THANK GOD FOR IPL


You know this startup. The year was turning out to be a washout. That changed when it bagged important rights to the IPL a few weeks ago. We hear the deal has helped it close a funding round 2.5 times its earlier valuation. This after spending an entire year negotiating in vain with virtually every large tech investor in the world—-from large private equity funds to hedge funds. The company's early investors are set for a bumper return. One early investor could make even 4-5x of its invested capital. Fundraising is often a slip between the cup and lip, but this one is almost sealed.

CHINESE? YEAH, RIGHT!

CHINESE? YEAH, RIGHT!


Talking about startups, three mid-sized ones in India have hit a Chinese wall so to speak because the government has put a squeeze on funds from Dragon Land. A case of so near yet so far for these founders as these deals were sealed a few months ago. With money in the bank drying up, these startups have been pinching pennies and slashing budgets to the bone. One of them has been talking with an American firm to raise money. But no luck yet. Uncle Sam too doesn't have appetite for Chinese soup.

SPLIT WIDE OPEN

SPLIT WIDE OPEN


What’s going on with this old family business in Eastern India? It has been decimated by the virus. As if that wasn’t enough, an impending split is looming. While the older generation has tried its best to delay the inevitable, the new kids on the block are upset with the pace of growth and unequal distribution of power within the family. One of the younger generation members has threatened to drag the family to court if equitable distribution is not done quickly. The drama has just begun. Watch out for this one. We hear it will be nasty.

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