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Vikas Dugar
Aayush Vishnoi

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Chinese Wall

ëource: Gë ëumer Internship presentation


2006
M xelationship Development
M Acquisition ëtrategy
M IPO Advisory
M Defense ëtrategy
M ëale Advice
M Execution of M&A
M Debt xestructuring to avoid bankruptcy
M xelatively low valuations
M Liquidity Crunch (For FI¶s)
M Global Expansion by Firms
M ëtructured Products that aid fund raising for deals
M ëhareholder Activism
M Participation by Private Equity Firms
M ëEBI Take-Over Code
M Anti-Trust Laws
M FDI norms on key sectors
M Aë on Amalgamations
M Amalgamation by Pooling of xesources
M Amalgamation by Acquisition
M Multiple Based Valuations
M P/E, EV/Tonne
M Comparables Method
M ëum of the Parts Valuation
M Most often method used in M&A today
M DCF Valuations
M Used in Manufacturing Industries
M ëteel
M Metals (Aluminum)
M Banks and Financial ëervices
M Automobile
M Telecom
M Airlines
M ëpirits Business
M xetail
M IT & BPO ëervices
M Major Deals
M §  
M 

M   
 

 

 
M Parameter for Evaluation: EV/Tonne
M Did Tata ëteel over-pay?
M What is Tata ëteel doing with Corus?
M Major Deals
M  
 
M Parameter for Evaluation:
EV/Tonne
M What was the reason for this
acquisition?
M Did Hindalco over pay?
M Major Deals
M §  
M 

M   
 

 

 
M Parameter for Evaluation: EV/Tonne
M Did Tata ëteel over-pay?
M What is Tata ëteel doing with Corus?
M Major Deals
M    
M   
M Parameter for Evaluation:
EV/Tonne
M What was the reason for this
acquisition?
M Did Hindalco over pay?
M Major Deals
M ëtakes acquired in Gë & Më
M Lloyds TëB acquisition of HBOë
M PM acquisition of Bear ëterns
M xBë acquisition of ABN AMxO
M India: HDFC & CBOP
M Events out of the credit crisis
[ Parameter: Geographical ëpread, CAëA: Current Account
ëavings Account, Advances Growth, Gross NPA ratio, Net NPA/Net
advances, xWA/Total Assets, Cost / Income xatio, Cost of Funds,
NIM-Net Interest Income/(Average Interest Bearing assets),
[ Capital Adequacy ratio-need to raise capital
[ Insurance
r Fast Growth-Long gestation period
r ëolvency xatio-Driving the need to raise capital
[ Brokerage Industry
[ NBFCs:
r Home Loans
r Vehicle loans
r Personal Loans
r Infrastructure Loans
[ Micro Finance
M Major Deals
M Idea Cellular - ëpice
M Hutch ± Vodafone
M Unitech-Telenor, ëwan- Etisalat
M NTT Docomo-Tata teleservices
M Parameters:
M xevenue=ëubscribers x AxPU
M xevenue = xPM x MOU
M ëpectrum availability (900 Mhz, 1800 MHz)
M EVA/No. of subscribers
M Common Questions:
M a 

 
 

 
M a 
 
 

a 

 
 
 


M a 

 

 
 

 
 
 
 
     
[ 24-billion cash-and-share swap deal which will have
over 200 million subscribers and 20 billion in annual
revenues
[ Bharti to buy 49% of MTN for 14 billion MTN, to
acquire 33% of Bharti for about 10 billion
[ Merged entity to be the world¶s third-largest mobile
phone operator by subscribers that would straddle Africa,
Asia and the Middle East.
[ ëouth African government keen on dual listing ±Indian
laws do not allow dual listing
[ GDx issues with voting rights may fall under ëEBI
takeover code
M Major Deals
M Ê   
  
!
M "
  
 
M Parameters: Average fuel costs, average yield/passenger,
average yield/kg, Passenger Load Factor, Number of
Departures, revenue/passenger-km
M What is the current industry scenario? Further
Consolidation?
M Details regarding et & Kingfisher agreement/
Deccan buyback
[ Major deals:
r ëatyam-Tech Mahindra
r Axon Group Plc-HCL Technologies
r Citigroup Global ëervices-TCë
r Citi technology services Ltd.-Wipro
r Aviva global services-WNë Holdings Ltd.

[ Parameters: Geographical split, Vertical split, Utilisation rate,


Attrition, Pricing, Employee additions, Client additions, Hedged
forex positions.
M Major Deals
M d
 a 
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M d
   
M 


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M Parameter: Brands, Access to markets,
Capacity
M Did UB over pay?
M Further Acquisitions?
[ Oil and Gas:
r Imperial Energy Corp Plc-ONGC
r xeliance petroleum Ltd-xeliance Industries Ltd
[ Pharma: xanbaxy-Daiichi ëankyo
[ Auto and auto ancillary: Lx-Tata Motors
[ Infrastructure and Engineering sector
[ xetail
[ FMCG
M Future Acquisitions in Industries?
Why?
M 3 companies to acquire?
M 3 companies to have stake in?
M What strategy would you pitch to the
leader in the market?
The market for new issue of securities.

[ Primary market issuers are bodies corporate, mostly


companies under the Companies Act, 1956. Other bodies
corporate are corporations owned pre-dominantly by the
Government.
[ The main market for new issuances are Public Issues
(IPOs and FPOs), xights Issues and Private Placements.
[ The main constituents of the primary market are ±
Investors, Issuers, Instruments and intermediaries.
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[ Also known as Qualified Institutional Buyers (QIBs) as
per regulations ±
r Multilateral, Bilateral and Domestic Financial Institutions (MFIs/
DFIs)
r Foreign Institutional Investors (FIIs)
r Unregistered Foreign Investors (FDI Investors)
r Foreign Venture Capital Investors (FVCIs)
r Domestic Venture Capital Investors (VCs)
r Domestic Mutual Funds (MFs)
r Commercial Banks
[ High Networth Investors ± These are investors who cannot be
categorized either as Institutional or xetail ±
r Non-banking Financial Companies
r Capital Market Intermediaries (other than in issues wherein they are acting
in official capacity)
r Investment companies, trusts, societies and other incorporated bodies
r Partnership Firms
r HUFs and Individuals
[ xetail Investors ±
r Are those whose application in a public issue does not exceed xs. 100,000
in value.
r Any of the above category of investors under the HNI category can be a
retail investor if the application size does not exceed the above limit.
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