National Highway Authority of India (NHAI) plans to raise funds up to Rs 1,000 crore through public issue of tax free, secured redeemable non convertible bonds. (Express Photo)

The National Highway Authority of India (NHAI) plans to raise funds up to Rs 1,000 crore through public issue of tax free, secured redeemable non convertible bonds.

The issue will open tomorrow and is scheduled to close on December 31, 2015 with an option of early closure, it said in a statement.

“The funds raised through this issue will be utilised for the part financing of various ongoing projects under the NHDP and also various special projects and future projects to be awarded under different modes”, it added.

The bonds will have a face value of Rs 1,000 each for an amount of Rs 1,000 crore with an option to retain oversubscription of up to additional Rs 9,000 crore aggregating up to a total of Rs 10,000 crore, NHAI said.

“The interest income on bonds is exempted from levy of income tax in the hands of the investors as per notification …,” the statement said.

The coupon rate for Category I, Category II and Category III investors – Qualified Institutional Buyers, Corporates and High Net worth Individuals – will be 7.14 per cent and 7.35 per cent for tenures of 10 years and 15 years in series IA and series IIA respectively.

The coupon rate for Category IV investors – Retail Individual Investors – will be 7.39 per cent in series IB and 7.60 per cent in series IIB for tenures of 10 years and 15 years, respectively, it added.

NHAI said the retail individual investors are being offered 0.25 per cent more than other category of investors for bonds of corresponding tenure.

The bonds are proposed to be listed on the BSE Limited and NSE.

SBI Capital Markets, A K Capital Services, Edelweiss Financial Services, ICICI Securities and Axis Capital are the lead managers to the issue.

Karvy Computer Share Pvt Ltd is the registrar to the issue while SBICAP Trustee Company is the bond trustee to the issue.

Narayana Hrudayalaya IPO: The healthcare major has fixed the price band between Rs 245 and Rs 250 for its IPO.

Narayana Hrudayalaya’s initial public offer (IPO) will hit primary markets on December 17. The healthcare major has fixed the price band between Rs 245 and Rs 250 for its IPO. This will be the third IPO this month from the healthcare sector after Alkem Laboratories (oversubscribed by 44.29 times) and Dr Lal Pathlabs (oversubscribed by 33.41 times) to hit markets this month.

Not more than 50 per cent of the issue will be allocated to Qualified Institutional Buyers (QIBs), including 5 per cent to the mutual funds. Additionally, not less than 15 per cent of the issue will be available for the non-institutional bidders and the remaining 35 per cent for the retail investors. The issue will close on December 21, 2015.

The shares will be listed on BSE as well as NSE. The face value of the share is Rs 10 and is priced 24.5 times of its face value on the lower side and 25.0 times on the higher side. The public offer will close on December 21.

The objective of the offer is to get the benefits of listing the equity shares on the stock exchanges and for the sale of 20,436,081 equity shares by the selling shareholders. The company also expects that the listing of the equity shares will enhance its visibility and brand image among its existing and potential clients and provide liquidity to the existing shareholders. The company will not receive any proceeds of the offer and all the proceeds will go to the selling shareholders.

The book running lead managers to the issue, Axis Capital, IDFC Securities and Jefferies India, while the Compliance Officer for the issue is Ashish Kumar.

The company has a network of 23 hospitals (multi-speciality and super-speciality healthcare facilities which provide tertiary care), 8 heart centres and 24 primary care facilities including clinics and information centres, across 31 cities, towns and villages in India. In 2014-15, the facilities provided care to over 1.97 million patients.

Revenues of Narayana Hrudayalaya grew at a CAGR of 30 per cent in FY11-15. The contribution from its top five hospitals by revenue was 67.5 per cent in FY15 compared to 80.5 per cent in FY13. The contribution from in-patient billed revenue from specialties outside of cardiac and renal sciences was 38.3 per cent in FY15 compared to 32.3 per cent in FY13.

Due to a subdued operational performance and higher financial, depreciation and taxation, the company registered a net loss of Rs 10.9 crore in the previous financial year ended March 2015. In FY13 and FY14, it reported net profit of Rs 24.80 crore and Rs 31.70 crore, respectively.

Should you invest
ICICIdirect.com in a research report said, “At the IPO price band of Rs 245-250, Narayana Hrudayalaya is available at 3.9x on EV/Sales of FY15 and EV/per Bed of Rs 97.6 lakh. Though the valuation is a tad expensive, it is in line with the recent deals in the healthcare industry. We recommend that investors can ‘Subscribe’ to the issue.

Howevever, Hem Securities in a research report said, “Though company’s business model looks attractive but looking after the financials, valuations looks expensive at current levels. Hence we recommend investors to ‘Avoid’ the issue.”

Angel Broking has a ‘Neutral’ view on the IPO from a short term perspective. However, investors with a longer term investment horizon can subscribe to the issue considering that the company’s performance is expected to be more favorable in the longer run as the hospital business entails a longer gestation period and takes time to perform at optimum levels.

Everest Kanto share price hit a new 52-week high of Rs 15.45 on Wednesday after the Supreme Court ruling on diesel vehicles. (Express Photo)

Everest Kanto share price hit a new 52-week high of Rs 15.45 on Wednesday after the Supreme Court ruling that only CNG-run taxis will be allowed to ply in Delhi and NCR. The company is engaged in the business of manufacturing industrial and CNG cylinders.

At 12.36 pm, the scrip was trading 15.50 per cent up at Rs 15.20. It opened at Rs 13.25 and had touched a high and low of Rs 15.45 and Rs 13.11, respectively, in trade so far. The share of the company surged as much as 17 per cent intraday on Wednesday. Sensex was up 0.98 per cent at 25,567.89.

In the past one year, the share price of Everest Kanto Cylinder climebed 24.62 per cent to Rs 13.16 on December 15. The benchmark index BSE Sensex fell 7.32 per cent during the same period.

For the quarter ended September 2015, the company posted a consolidated net loss of Rs 33.81 crore, down 34.06 per cent, against Rs 25.22 crore in the corresponding quarter a year ago.

The promoters holding in the company stood at 64.07 per cent while institutions and others held 0.27 per cent and 35.66 per cent respectively.

Indian stock markets have been behaving with caution ever since the speculation started trickling in on the Fed rate hike. (Photo: PTI)

All eyes are on the US Federal Reserve meeting that began on Tuesday with expectations rife that the central bank may go for a 25 basis points rate hike in a decade on Wednesday.

The Fed has kept its benchmark short-term rate near zero since setting it there in 2008 to help save the financial system in the depths of the financial crisis. The US Fed is ready to begin lifting rates toward normal levels with the job market all but fully healthy.

Indian stock markets have been behaving with caution ever since the speculation started trickling in on the Fed rate hike. According to the Bank of America-Merrill Lynch, “The BSE Sensex has been struggling in view of the uncertainties surrounding Grexit-II and the first Fed hike as valuations are on the higher side. We expect the Fed to raise rates by 25 basis points on December 16. In response, the RBI should sell foreign exchange to contain rupee volatility, if any.”

The benchmark index BSE Sensex fell 3.43 per cent since the outcome of the US Fed on September 17 where it maintained status quo but kept a space open for a gradual hike in interest rates.

Anticipating the US Federal Reserve may go for a rate hike, Reserve Bank of India (RBI) governor Raghuram Rajan last week had said that the central bank was ‘prepared’ for any change in global financial flows and market volatility.

“We don’t have any independent estimate, but looking at the market, there is a 70-75 per cent probability of the Fed raising rates. I think the Fed has prepared us carefully. So, it is likely that at this point they will go ahead, at least that is our betting,” Rajan said.

On asking about how the stock market will react if US Fed goes for a rate hike, an independent market expert Ambareesh Baliga said, “Stock markets could infact move up after an initial knee jerk reaction.”

However, Moody’s Investors Service cautioned investors and said the likely interest rate hike by the US Federal Reserve this week could pose risks to some emerging markets. Downside risks will remain for some emerging markets depending on the degree of exposure to rising US interest rates. The report did not specify rate hike impact on India.

G Chokkalingam, founder and managing director, Equinomics Research said, “Rate hike will certainly be considered as positive for domestic equity markets as the same would reduce fear on global defaltion. The industrial economy has also bottomed out which is reflected in terms of better IIP and robust fuel consumption and also indirect tax revenues. Hence, one can hope for market recovery post Fed rate hike.”

Earlier, between 2004 and 2006, the US Fed raised interest rates 17 times from — 1 per cent to in June 2004 to 5.25 in June 2006. This coincided with a period of high growth in Indian economy alongwith relatively low interest rate regime.

The rate hike by US Fed that time resulted in a sharp outflow from Indian debt markets. Foreign Institutional investors (FIIs) pulled out significantly from the Indian debt market and their cumulative holding went down from $1.77 billion in December 2004 to $550 million by June 2006. On the contrary, Indian equities, chasing high growth in the economy, witnessed a strong inflow — FII pumped in a record Rs 1,22,687 crore between 2004 and 2006. But this was the time when asset classes were doing well and there were few uncertainties.

Nikhil Kamath, director, trading & risk, Zerodha said, “a marginal 25 bps rate hike in overnight Federal funds is quite imminent and in all likelihood the decision to do so could be taken in the ongoing review meet. Markets across asset classes – equities in emerging markets, international currencies, and LIBOR markets have factored in this hike to a large extent. Hence given a rate hike, I do not foresee a big sell off in the Indian markets.”