Mahindra & Mahindra (M&M) plans listing of resort, software arms

5th November 2005: M&M is planning to go public with Club Mahindra Holidays and Mahindra British Telecom (MBT) after listing its financial subsidiary Mahindra & Mahindra Financial Services (MMFSL) over the next two months. "After MMFSL, group companies of M&M that would be listed shortly includes Club Mahindra Holidays and MBT," said Bharat Doshi, executive director - finance and corporate affairs, M&M. They are likely to be listed next calendar year, a source close to the company said.

The M&M group has 43 subsidiaries. Club Mahindra is one of the prominent travel and hospitality companies in the country, specialising in vacation ownership. It reported a net profit of Rs 9.9 crore in the first half of fiscal 2005-06 ended September 30, registering 147% growth over Rs 4 crore posted in the previous corresponding period. The company reported net sales of Rs 68 crore during the period, up 57% over Rs 43 crore recorded in the corresponding period in the last fiscal. On the other hand, MBT reported a 36% increase in the bottomline to Rs 71.2 crore for the half-year ended September 2005. Revenues grew by 4% to Rs 503.2 crore. "Contribution from non-BT business has gone up to 34% from just 18% in the previous year," said Doshi.

MMFSL, which will be listed soon, reported a net profit of Rs 44.97 crore for the year ended September 30, 2005, 15% growth over Rs 39.11 crore, reported a year ago. For the period, income from operations grew by 39.46% to Rs 248.58 crore against Rs 178.24 crore registered in the previous corresponding period.

Overall, the M&M group reported a profit after tax (before minority interest) of Rs 451.3 crore for the first half of the current financial year, a 56% rise from the last fiscal's Rs 289.9 crore. Gross sales and other income for the period grew to Rs 6,084.6 crore, 25% growth over Rs 4,879 crore reported in the previous corresponding period. "Of the Rs 451.3 crore PAT (profit after tax) reported in the first half of the current year, M&M's subsidiaries contributed Rs 180 crore, indicating growth of 100% over the previous corresponding period when they contributed Rs 90 crore. This is a commendable achievement," said Doshi.

Mahindra South Africa reported a net profit of Rs 10.75 crore during the first half of the current fiscal against Rs 3.9 crore clocked in the previous corresponding period. The group expects to cross Rs 1,000 crore in consolidated net profit by the end of the current fiscal. During the last fiscal, it had reported a PAT (before minority interest) of Rs 724 .1 crore. Last year, net profit for the second half grew by 50% to Rs 451 crore compared with Rs 289.9 crore reported in the first half.

"If the GDP growth continues to be in the above-7% range, and oil and steel prices remain normal, the group should maintain the growth rate that it achieved in the first half of the current year," said Doshi. This would take the group's net profit to the Rs 1,000-crore mark, and gross sales to Rs 12,000 crore for the full financial year. M&M also expects its consolidated net profit to cross Rs 1,000 crore by the end of the current financial year. During the last financial year, the group had reported profit after tax (before minority interest) of Rs 724.1 crore. Last year, net profit for the second half grew by 50% to Rs 451 crore compared with Rs 289.9 crore reported in the first half.

Companies with Indian accounting norms can list on London Stock Exchange (LSE)

5th November 2005: INDIAN companies can now get listed on LSE by reporting their financial results based on Indian accounting standards. Until now, these companies had to report their financial data in accordance with the International Financial Reporting Standards (IFRS).

LSE has also allowed overseas companies listed on Luxembourg Exchange to trade on the London Exchange. These relaxations are seen as a move to attract more Indian listing on LSE. This follows the implementation of the European Union Prospectus Directive on July 1, 2005.

"As before, Indian issuers can raise capital from London's professional investors yet adhere to the accounting standards of their choice," said Mr. Hugh Sandeman, Head of Business Development for India of LSE, at a press conference.

With this new rule, Indian companies can list directly with the UK Listing Authority (UKLA), but can continue to use India's generally accepted accounting principle, instead of conforming to the new European requirement for listed companies to report.

This exception from EU securities regulation will be available to Indian companies and other Third World countries on an indefinite basis for depository receipts, convertible bonds and debt.

Mr. Sandeman said by introducing the exemption, LSE and UKLA have ensured continuity for Indian global depository receipts and foreign currency convertible bonds issuers.

At present, 20 Indian companies' GDRs are listed on LSE main market. However, the companies which follow Indian accounting standards will not be able to market and sell their securities to retail investors.

The exchange has started actively promoting its International Order Book platform for GDRs in India; wherein companies' securities listed on Luxembourg Stock Exchange can be traded on LSE.

Mr. Martin Graham, Director of Market Services, LSE, said major Indian companies listed on Luxembourg Stock Exchange are actively traded on LSE. Some of the Indian companies traded on International Order Book platform are Ballarpur Industries, Reliance Industries, Grasim Industries, Hindalco, ITC, Larsen & Tourbo and others.

Mr. Graham said there are 241 companies from 21 countries on International Order Book. "Last year, total trading value in depository receipts was in excess of $100 billion of which the shares of Indian companies were a healthy five per cent."

Vedanta arm to buy rest of Malco

26th November 2004: Twinstar Holdings, a unit of London-listed miner Vedanta Resources group, plans to acquire the remaining 20% stake in Madras Aluminium Company Ltd. Twinstar planned to delist shares of Madras Aluminium from all stock exchanges after the acquisition, a statement said.  Twinstar holds an 80% stake in Madras Aluminium, while the rest is with the public.

Malco in a release has stated that the post acquisition the acquirer intends to delist the equity shares of the company from all the stock exchanges. The process will be through book building route as required under Sebi delisting of securities guidelines. Twinstar holdings has called for an extraordinary general meeting of Malco shareholders to seek the approval, following which Twinstar will make an open offer to the balance shareholders.