Sept 25, 2012
USL and Diageo officially confirm that Diageo is in discussion with USL and United Breweries (Holdings) to acquire controlling stake in USL.

Nov 9, 2012
Diageo announces it will acquire 3.77 cr shares, representing 26% stake at R1,440 per share

April 2, 2013
Lenders sell USL shares in open market as open offer price of R1440 appear unattractive

April 10-26, 2013
Diageo’s first attempt to acquire shares from public shareholders gets muted response

May 27, 2013
USL board announces issuing 1.45 crore shares to Diageo on preferential basis. Diageo pays  R2,092 crore for stake buy

Dec 20, 2013
Karnataka High Court annulled sale of 6.9% stake in USL to Diageo by guarantor United Breweries (Holdings)

May 26, 2014
Diageo gets Sebi nod for open offer to acquire 26% stake in USL

June 2014
Diageo raises open offer price to R3,030/ share. Transaction valued at R11,423 cr on offer price

June 11-24, 2014

Diageo acquires majority stake in USL and raises ownership to 54.7% Largest in-bound deal since Vedanta-Cairn merger in Dec 2011

Nov 28, 2014

Minority shareholders defeat nine out of 12 special resolutions during company’s EGM, bringing setback to the integration between USL and new owner Diageo Plc.

Jan 10, 2015

United Spirits gets minority shareholders nod for Diageo licensing and cost sharing agreements with certain subsidiaries of its parent Diageo Plc

Early 2015

USL appoints PwC UK to conduct forensic audit on USL accounts from 2010-2013 for alleged fund diversion and financial irregularities in related party transaction among UB group companies

April 2015

USL board ask Vijay Mallya – owning 4% stake in USL, to step down for his involvement in alleged financial irregularities

May 1, 2015

The ICAI questions USL’s two auditors for financial irregularities in USL books from 2010-2013 to various United Breweries (UB) group entities, and alleged fund diversion of R2,100 crore

May 2015

Sebi asks United Breweries to restate accounts for last two years to address issues flagged by the auditors

July 2015

USL, owned by Diageo, sells 3.21% stake in United Breweries for R872 crore to Heineken International BV, the co-promoter of the beer company. Heineken’s stake rises to 42.2%

Nov 2015

Supreme Court admits petitions filed by British group Diageo Plc and United Breweries Holdings in a matter related to the sale of USL

Source: Stock exchange announcement, Media reports

Assign ‘add’ rating on Adani Ports with a revise SOTP-based target price to R 310 (from R340 per share) led by lower coal and other volumes estimates across ports, and higher revenue share to maritime boards for concession renewal.

Adani Ports has intensified its focus on (1) increasing the share of containers and liquid cargo volumes in the overall mix, (2) replicating the success of Mundra across other ports, (3) reducing the debt cost further, and (4) monetizing the SEZ. The benefits of these will fully reflect in the medium term. The present high mix of bulk cargo and EXIM slowdown will impact in near term.

During our recent meeting, the management outlined its focus on the growing share of container cargo over time. Recent additions of Vizhinjam and Kattupalli ports corroborate this strategy. The company has similar plans to grow liquid volumes and sees strong uptick in demand at key ports (Mundra, Hazira). Such a strategy will reduce exposure to bulk cargo where visibility of business growth over the medium-term is low, in our view. The other areas of management focus are replicating the success of Mundra (fungible capacities, high level of mechanization, tight leash on capex/opex) across other ports, and further reducing the cost of debt for both foreign currency and domestic debt helped by good credit rating. Adani Ports now has 10 ports in its fold, including Kattupalli (acquisition pending approvals).

Maintain ‘buy on UPL with target price of Rs 560 based on 15x FY17e EPS. Our positive stance on UPL stems from its diversified agricultural business model and sharpened focus on organic growth along with strengthening balance sheet. We have not considered the impact of the merger in our estimates currently. UPL has been trading in the 6-15x P/E range over the past five years. At current price, the stock trades around 15x FY16e and 12x FY17e EPS.

UPL announced the merger of Advanta India (Advanta; associate company in which UPL owns 48.4% stake) with itself. The company will issue equity shares in the 1:1 ratio along with preference shares of 3:1 to Advanta’s shareholders. The merger will lead to equity dilution of 19% for UPL. Further, holders of 100 GDRs will be issued 106 GDRs of UPL and 100 FCCBs of UPL will be issued for 100 FCCBs held in Advanta. The company will issue 77.5 million fresh equity shares and 181.8 million preference shares to Advanta’s shareholders.

Management anticipates the merger to yield benefits like incremental geographical reach, synergies in production, logistics & distribution and annual savings of R900 million. It will also enable UPL to have presence throughout the entire agri-input value chain (from seeds to post harvest agrochemicals).

Even as the Indian equity market is trading near its long-term average valuations, given the slowdown in corporate earnings in the past three years, the forward earnings multiple appears expensive compared to its median value for the period.

As per Bloomberg data, the Sensex is trading at one-year forward multiple of 15.2 times, which is 4% to 6% premium to its average multiple over the last three and five years, respectively. The ten-year average forward price-to-earnings multiple of the Sensex is 14.9 times.

As the corporate earnings started reflecting the slowdown in economic activity, analysts have argued whether lower valuation multiple may be the new normal for Indian equities.

This premise took a back seat last year, when the market was largely supported by the optimism around the general election and a subsequent clear majority won by the Bharatiya Janata Party. However, as the earnings numbers of India and looming analyst downgrades now are the key driver for market momentum, the Sensex may be looking at lower valuation multiple.

Recently, Kotak Institutional Equities argued that though the market appears reasonably valued with the Nifty trading at 15 times its expected earnings for FY17, valuations may start looking pricey once earnings estimates are cut further.

An earlier FE compilation shows that Sensex earnings grew nearly 2.5 times India’s annual GDP growth in the decade ending FY11. However, post that as the GDP growth slowed down to lower single digits, the earnings momentum has come off.

During the five years ended fiscal 2007-08, when India’s economy grew 8.7% per annum on an average, the earnings growth turned particularly strong at nearly 24% per year. However, in the subsequent four years ended FY12 when the mean GDP rate came down to 7.7%, average earnings growth stood at about 10%. Over these four years,the Sensex one-year forward P/E multiple stood at around 13 times compared to its average of about 15 times in the previous five years.

Shares of Reliance Communications on BSE surged over 9 per cent today to Rs 71.15 on stake sale buzz.

Reliance Communications (RCom) is close to finalising a deal to sell its entire stake in tower unit Reliance Infratel, sources aware of the development said.

RCom owns about 96 per cent stake in Infratel and the sale would fetch it around Rs 22,000 crore, which will be used to retire some debt.

The sources further added the deal values Infratel at around Rs 22,500 crore. Reliance Infratel has about 43,500 mobile towers.

The debt of RCom stood at around Rs 38,000 crore.

According to sources, the deal is almost finalised and is likely to be announced within 10 days.

When contacted, RCom declined to comment.

A few months ago, RCom had said that it had short-listed bidders that have sought to acquire up to 100 per cent stake in Infratel.

RCom is looking to monetise its non-core assets to bring down the the debt-to-Ebitda ratio to about 3 in 18-24 months.

The company’s net debt-to-Ebitda ratio is about 4.64.

To achieve this target, the Anil Ambani group firm is planning to hive off its DTH business, sell stake in international operations at Reliance Globalcom and divestment of Infratel, among others.

In general terms, debt-to-Ebitda ratio is the measure of the ability of a firm to pay off its debts and is a useful tool in assessing the creditworthiness of a company.

Shares of Reliance Communications on BSE surged over 9 per cent today to Rs 71.15 on stake sale buzz.