Reliance Infratel, the tower subsidiary of Reliance Communications, has proposed to raise Rs 6,000 crore through an Initial Public Offering (IPO) and has filed the Draft Red Herring Prospectus with the Securities and Exchange Board of India (SEBI).
The Anil Ambani group company has proposed to offload 10.05 per cent stake to the public, which puts the valuation of the company at around Rs 60,000 crore. The IPO follows that of another group company, Reliance Power, which is to be listed on February 11.
According to the DRHP, Reliance Infratel has proposed to offload 8,91,64,100 equity shares of Rs 5 each at a price that will be decided through the book building process.
The issue proceeds will be utilised to finance development of passive infrastructure sites and for general corporate purposes. Upon the completion of the listing, the company intends to list the shares both on BSE and NSE.
Around 60 per cent of the issue will be allocated to Qualified Institutional Buyers (QIBs), with 5 per cent for mutual funds, and 30 per cent to be allocated on a proportionate basis to retail individual bidders.
Showing posts with label BN. Show all posts
Showing posts with label BN. Show all posts
Monday, February 4, 2008
Used-car prices in reverse gear ahead of Nano
Call it the “Nano effect” but less than a month after Tata Motors displayed its competitively-priced small car at the Delhi auto show, prices in the 1.3-million used-car market crashed 15 to 30 per cent, if not more.
The Nano, due to be launched this October, will carry an on-road price of about Rs 1.3 lakh (for the base model), which is lower than the price of many used cars in the A segment (which includes the Maruti 800 and Alto, for instance).
“The price of a second-hand Maruti 800 has dropped over 30 per cent since the Nano was unveiled. To give an indication, the price of a 2002 model has dropped from Rs 1.1 lakh in December to Rs 75,000 today,” said Arif Fazulbhoy, director, Fazulbhoy Motors, one of Mumbai’s largest car dealers.
A 2003 Hyundai Santro that was available for Rs 2 lakh before the Nano display, is now on offer with an 18 per cent discount at Rs 1.65 lakh.
A 2003 WagonR model from Maruti Suzuki is currently sold at Rs 1.8 lakh, a discount of Rs 33,000 on its used-car price of December.
CRASH COURSE
Model Year Revised price (Rs) Prices prior to Nano display (Rs)
M800 2002 75,000 1,10,000
Santro 2003 1,65,000 2,00,000
WagonR 2003 1,80,000 2,13,000
Alto 2004 1,10,000 1,35,000
Esteem 2003 2,80,000 3,20,000
Ikon 2004 3,90,000 4,30,000
Palio1.9 2003 2,55,000 2,95,000
Despite this steep price drop, Fazulbhoy said it is hard to find buyers because many are postponing their purchase decisions till the Nano launch.
“With Nano’s entry the three-year-old Alto has now become affordable to the buyer who was earlier looking only for a Maruti 800 used car,” added Sunil Mittal, vice -president — network and business development — of one of Delhi’s largest used-car dealers, First Choice Wheels (earlier known as Automart India).
Mittal said the price of a three-year-old Alto has dropped from Rs 1.35 lakh to Rs 1.10 lakh since the Nano went on display.
The small used-car market accounts for over 70 per cent of all used-car sales within the country. Eighty-five to 90 per cent of all car sales from the Maruti True Value outlets are small cars.
However, despite car manufacturers getting into used cars the unorganised market dominates the country’s used car market.
Analysts and dealers predicted that used-car prices will only head further south once the Nano is on the roads. “The Nano will cannibalise used-car sales by exerting more downward price pressure,” said Vaishali Jajoo, auto analyst in Angel Broking, who sees prices falling 10 to 20 per cent more.
Accordingly, used-car dealers are bracing themselves for a squeeze on margins. Admits Ankit Sharma, manager — sales — in Delhi-based Patliputra Automart India: “With the small car contributing 70 per cent of our sales, used-car dealers might have to refocus their business on high-end cars.”
Also, as a Mumbai-based dealer pointed out, “When a Nano buyer is getting a better finance deal with a monthly instalment of Rs 1,100, at a much cheaper interest rate (11 per cent), why would he go for a second-hand car, which carries an interest rate of 17 to 18 per cent?”
The Nano, due to be launched this October, will carry an on-road price of about Rs 1.3 lakh (for the base model), which is lower than the price of many used cars in the A segment (which includes the Maruti 800 and Alto, for instance).
“The price of a second-hand Maruti 800 has dropped over 30 per cent since the Nano was unveiled. To give an indication, the price of a 2002 model has dropped from Rs 1.1 lakh in December to Rs 75,000 today,” said Arif Fazulbhoy, director, Fazulbhoy Motors, one of Mumbai’s largest car dealers.
A 2003 Hyundai Santro that was available for Rs 2 lakh before the Nano display, is now on offer with an 18 per cent discount at Rs 1.65 lakh.
A 2003 WagonR model from Maruti Suzuki is currently sold at Rs 1.8 lakh, a discount of Rs 33,000 on its used-car price of December.
CRASH COURSE
Model Year Revised price (Rs) Prices prior to Nano display (Rs)
M800 2002 75,000 1,10,000
Santro 2003 1,65,000 2,00,000
WagonR 2003 1,80,000 2,13,000
Alto 2004 1,10,000 1,35,000
Esteem 2003 2,80,000 3,20,000
Ikon 2004 3,90,000 4,30,000
Palio1.9 2003 2,55,000 2,95,000
Despite this steep price drop, Fazulbhoy said it is hard to find buyers because many are postponing their purchase decisions till the Nano launch.
“With Nano’s entry the three-year-old Alto has now become affordable to the buyer who was earlier looking only for a Maruti 800 used car,” added Sunil Mittal, vice -president — network and business development — of one of Delhi’s largest used-car dealers, First Choice Wheels (earlier known as Automart India).
Mittal said the price of a three-year-old Alto has dropped from Rs 1.35 lakh to Rs 1.10 lakh since the Nano went on display.
The small used-car market accounts for over 70 per cent of all used-car sales within the country. Eighty-five to 90 per cent of all car sales from the Maruti True Value outlets are small cars.
However, despite car manufacturers getting into used cars the unorganised market dominates the country’s used car market.
Analysts and dealers predicted that used-car prices will only head further south once the Nano is on the roads. “The Nano will cannibalise used-car sales by exerting more downward price pressure,” said Vaishali Jajoo, auto analyst in Angel Broking, who sees prices falling 10 to 20 per cent more.
Accordingly, used-car dealers are bracing themselves for a squeeze on margins. Admits Ankit Sharma, manager — sales — in Delhi-based Patliputra Automart India: “With the small car contributing 70 per cent of our sales, used-car dealers might have to refocus their business on high-end cars.”
Also, as a Mumbai-based dealer pointed out, “When a Nano buyer is getting a better finance deal with a monthly instalment of Rs 1,100, at a much cheaper interest rate (11 per cent), why would he go for a second-hand car, which carries an interest rate of 17 to 18 per cent?”
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