Private placements

2011 .Private debt placements fall to Rs 1.02 lakh crore in H1-FY12 Econimic Times 30 NOV.

2009 ET .Domestic private placement of equity shows revival signs August 27.

53 pc via QIP July 8. 2009 ET .Morgan Stanley hikes stake in Unitech to 5.

2009 ET .Educomp Solutions raises Rs 607 cr via pvt placement of shares July 9.

2003 .LIC picks up Big Bull's stake in L&T. Telco Econimic Times Apr 9.

IFCI Venture Capital Funds. today said it has concluded a shareholders agreement with four firms for private placement of equity worth over Rs 79 crore(16. UTI Asset Management Company and Indian Infrastructure Development Seed Asset(IIDSA) of Mauritius Sabarmati Gas inks agreement for private placement of equity -IndiaPE.com .‡ Sabarmati Gas Ltd.2 % stacke) ‡ India Infrastructure Fund. a joint venture of Bharat Petroleum and Gujarat State Petroleum Corporation.

down 1. Nagarjuna Construction to raise Rs 367 cr via share issue September 4.46 a piece. The board of directors have approved to allot 2. totalling to Rs 367.53 per cent from previous close. Shares of Nagarjuna Construction were trading at Rs 135.‡ Nagarjuna Construction today said it will raise Rs 367. 2009 ET . Nagarjuna Construction said in a filing to the Bombay Stock Exchange.32.50 on the BSE.35 crore by private placement with buyers.77.900 shares at Rs 132.35 crore by way of private placement of shares with qualified institutional buyers.

Are private placements a safe bet? Times of India August 21.000 crore private placement market for debt instruments be the setting for the next scam in the financial sector? certainly. they may be flouting section 67 (3) of the companies act that was amended in december. corporates are busy raising funds from banks largely through private placement of bonds.. 2001 Mumbai: could the booming Rs 50.. in the process. . taking advantage of the systemic loopholes. it is the least regulated of all financial issues since the investors are meant to be institutions and not retail.

the ministry of corporate affairs is planning to ask them to file an offer document elaborating investor details subscribing to the issue. with source of funds.Stricter norms for private placement Indian Express 14 march 2011 ‡ To bring more transparency in fund raising by unlisted companies through private placements. therefore. several unlisted companies have been offering securities to friends. the sources said. such offers is treated as made to public and the company has to file a prospectus with proper disclosures. At present. unlisted firms get away with making little or no disclosures. when a company makes an offer for shares or debentures to 50 or more people. planning to ask for mandatory offer documents or memoranda of information in all private placements to trace information on ultimate beneficial ownership and the end use of funds. associates or other persons in violation of section 67(3) . However. an official source told The Indian Express. . ‡ As per Section 67 (3) of the Companies Act. 1956. ‡ The ministry is.

Amendment 67(3) of Companies act in 2000 ‡ The amendment act says :The process of issuance of CAN and the final allotment to the QIBs would constitute the actualallotment to the investors and not an offer or invitation. ‡ A Written document stating the amount of shares that have been allotted and other details. .Any offer or invitation to subscribe for shares or debentures by providing placement documents to 50 or more persons (including QIBs) would not be a QIP placement under Chapter XIIIA of the SEBI (DIP) Guidelines as it would be regarded as offer to public in terms of proviso to section 67(3) of the Companies Act.

.Why did we not find a case study on Private Placements?? ‡ Private placements is a private afair and even SEBI does not have any right to interfere in the allotment of debt/equity to a QIP given it follows sec 67(3) of companies act 1956.

.What is Private Placement? Qualified institutional placement (QIP) is a capital-raising tool. whereby a listed company can issue equity shares. primarily used in India. or any securities other than warrants which are convertible to equity shares to a qualified institutional buyer (QIB). fully and partly convertible debentures.

The placement document is placed on the websites of the stock exchanges and the issuer. There is no pre-issue filing of the placement document with Sebi. with appropriate disclaimer to the effect that the placement is meant only for QIBs on private placement basis and is not an offer to the public. who shall not be promoters or related to promoters of the issuer. .Who can participate in the issue? The specified securities can be issued only to QIBs. The issue is managed by a Sebi-registered merchant banker.

if the size of the issue is up to Rs 250 crore and at least five allottees if the company is issuing securities above Rs 250 crore. ‡ No individual allottee is allowed to have more than 50% of the total amount issued . ‡ there are at least two allottees.What are some of the regulations governing a QIP? ‡ being listed on an exchange which has trading terminals across the country and having the minimum public shareholding requirements ‡ the company needs to issue a minimum of 10% of the securities issued under the scheme to mutual funds.

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