is relatively high. And we
have alternative lending
opportunities to the other
Tata group entities,” said
a Taipei-based senior loan
banker whose institution
had participated in a £640m
(US$850m then) loan for Tata
Motors in January.
That loan for Tata Motors
attracted 20 lenders in
general syndication. The
company returned in June for
a US$250m loan for a bond
buyback. Also, this month Tata
Power mandated five banks to
lead a US$245m refi.
In the rupee loan markets,
Tata Steel is seeking a giant
Rs210bn (US$2.89bn) financing
to take out a Rs165bn bridge
loan that funded its acquisition
of a controlling stake in
Bhushan Steel in May. It is also
expected to raise more funds
for the acquisition of Bhushan
Power & Steel, for which it is
locked in a bidding war. (See
India Syndicated loans.)
Forex fears derail Asian IPOs
Equities At least four deals on hold amid worsening slump in India, Philippines currenciesBY S ANURADHAThe continued slump in
emerging market currencies is
forcing some Asian companies
to delay their IPOs on concerns
of a weak response from
foreign investors.
In India LODHA DEVELOPERS,
FLEMINGO TRAVEL RETAIL and GR
INFRAPROJECTS have all halted
work on IPOs that aimed to
raise a combined US$1.6bn.
Elsewhere, consumer
technology company CAL-COMP
TECHNOLOGY PHILIPPINES pushed itsPs6.4bn (US$119m) IPO to the
middle of next year, hoping that
the weakness in the Philippine
peso will have subsided by then.
The companies joined several
Indonesian issuers who put
deals on standby back in May,
including the IPOs of Wahana
Vinyl Nusantara and state-
owned Wijaya Karya Realty and
a share placement from Barito
Pacific.
As with other emerging
markets, concerns over rising
oil prices and the adverse
impact of the US-China trade
war have hit the rupee and the
peso, which are respectively
down 13% and 8.2% against the
US dollar so far this year.
The three Indian companies
have been trying to launch their
IPOs since July, while Cal-Comp
originally planned a launch in
August. All four have struggled
to reach their valuation targets,
and bankers fear that currency
pressures would keep away
foreign buyers even if theydropped the IPO prices.
Foreign investors are seen as
key for Indian IPOs as they are
often willing to pay a premium
for the rare opportunity to
build a substantial stake in a
growing business.
But foreigners have been net
sellers in both India and the
Philippines this year. Data on
local stock exchanges show that
in the Philippines foreigners
have sold Ps82bn of shares,
while in India net selling has
totalled Rs70bn (US$970m).
“No one wants to be caughtin the eye of the perfect storm,”
an ECM banker working on the
Lodha IPO said. “We are hoping
the rupee will stabilise at some
point and investors will have
more confidence.”
A banker away from the
Lodha and Flemingo IPOs said
the issuers were having trouble
convincing investors to agree to
the valuations.
“The problems are not yet
over for the real estate sector
and no one quite understands
how Flemingo’s business
operates. The rupee’s fall just
made it worse.”
Prices in the Indian
real estate market have
been weighed down since
demonetisation in 2016.
Flemingo runs duty-free
shops in airports in India and
overseas and has no locally
listed competitor.
“Flemingo wants to market
itself as Avenue Supermarts [a
well-known listed supermarket
operator in India] but investorsare far from convinced,” a
Mumbai-based analyst said.
GR Infraprojects had finalised
the dates for a downsized
Rs12bn–Rs15bn IPO before
getting cold feet. The road
developer had earlier planned
an IPO of up to Rs20bn.
The IPO pipeline has not
totally dried up. In India, state-
owned IRCON INTERNATIONAL sold
a Rs4.7bn IPO last week that
attracted demand from local
and foreign investors. AAVAS
FINANCIERS and state-owned
GARDEN REACH SHIPBUILDERS are due
to open their respective Rs17bn
and Rs3.4bn IPOs this week.
In the Philippines, SAN MIGUEL
FOOD AND BEVERAGE is on track to
start pre-marketing in early
October ahead of a follow-on
offer that could raise up to
Ps124bn, the Philippines’
largest equity offering.
International books will
open for subscription between
October 12 and October 18.
Cal-Comp, a subsidiary of
Taiwan’s New Kinpo Group, is
planning to sell 378m primary
shares at a maximum price of
Ps17. BDO Capital is the issue
manager.
Lodha’s US$700m–$1bn IPO
comprises a primary tranche
of Rs37.5bn and a secondary
tranche of 18m shares. Founder
Mangal Prabhat Lodha’s family
is the vendor.
CLSA, JM Financial, Kotak
and Morgan Stanley are the
joint global coordinators and
bookrunners with BOB Capital,
Edelweiss, HDFC, ICICI Securities,
IIFL, UBS and Yes Securities.
Flemingo plans to sell
Rs24bn primary shares and 1m
secondary shares in its Rs25bn
IPO. Flemingo Duty Free Shop
Mumbai, a subsidiary of the
promoter.
Axis, Credit Suisse, HSBC, ICICI
Securities and Yes Securities are the
bookrunners on the float.
HDFC Bank, IDFC Bank, Motilal
Oswal and Yes Securities are the
bookrunners for the GR Infra
IPO. For daily news stories
visit http://www.ifrasia.comwith the deal because other
banks said there was enough
demand. We saw Tewoo’s
comparables widen amid
rising US-China trade tensions,
and were not comfortable
going ahead to price this,” he
said.
Tewoo’s outstanding
bonds have been under
pressure following a report
in May related to the default
of a property firm owned
by the Tianjin municipal
government, which is Tewoo’s
parent.
Health & Happiness, which
makes baby formula and
vitamins, did not give a reason
for withdrawing its exchange
offer and new issue, which
was intended to refinance
its US$600m 7.25% June 21
2021 bonds, but said it would
continue to look at ways to
reduce its finance cost and
optimise its capital structure.
H&H set the coupon at 6.5%
for a new US dollar five-year
non-call two senior secured
bond offering on Thursday
morning. (See China Debt capital
markets.)
“No one wants to be caught in the eye of the
perfect storm. We are hoping the rupee will
stabilise at some point and investors will have
more confidence.”