February 2010
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Fidelity offloads 2% stake in MCX to Passport India

Leading foreign institutional investor Fidelity International is said to have sold around 2% stake in MCX to Passport India, an existing shareholder in the commodity bourse, according to market sources. The sale is in keeping with government norms that restrict a single foreign investor’s shareholding in a commodity bourse to 5% by March 31, 2010. With this, Fidelity’s stake will come down to 7% while Passport India’s shareholding in MCX will rise to 5%. No confirmation was available on the pricing of the transaction. Fidelity had picked up around 9% in MCX in 2006 for $49 million, valuing the exchange at around $540 million. When NYSE picked up a 5% stake in MCX in 2008, the exchange was valued at $1.1 billion. When contacted, officials from MCX and Fidelity declined to confirm the development. […]

Bharti plans stake sale to repay loans for Zain deal

Bharti Airtel on Thursday held out the possibility of issuing fresh shares or divesting its holding in telecom infrastructurecompanies to lighten the burden of debt it must assume to fund its planned acquisition of most of the African operations of Kuwait’s Zain Telecom. Top executives at India’s largest mobile phone firm told analysts in a conference call that the purchase would be funded by medium-term debt — loans with maturity period between 1 and 10 years — which will then be repaid with money generated from operations as well as a likely equity issuance. A final deal is expected to be clinched by end-April or mid-May. “If we close the deal with full debt, it will still be at a sensible level. But we are debt-averse and will use a combination of free cash flow and equity to repay debt. […]

More new generation private banks to come up

The country is likely to get several more new generation private banks with the finance minister announcing that RBI is considering new bank licenses to promoters in the private sector and also NBFCs if they meet RBI eligibility criteria. A host of Indian corporates likes Tatas, Birla group, and some of the older NBFCs have been interested in a banking licenses. Among finance companies, Reliance Capital and Indiabulls have announced their interest in getting into banking. Lenders such as Exim Bank and SIDBI were also interested in a banking licence. If such a move happens this would be the first time post 2002 that RBI would look at such a move. […]