Street signs: Sebi's royalty move, KIOCL disinvestment, and more

India Inc, particularly multinational companies (MNCs), are keenly eyeing the market regulator’s next move with regards to royalty payment. In March, the Securities and Exchange Board of India (Sebi) had deferred the implementation of a new rule which requires any company paying brand usage or royalty payments in excess of 2 per cent of its annual consolidated turnover to obtain minority shareholder nod. The regulation, which drew flak from the corporate world, is to come into effect from June 30. Market players were hoping that Sebi will dilute the norms. With just few days left for implementation, MNCs are keen to hear from the regulator.
 
Samie Modak
 
Bankers shun KIOCL disinvestment 
 

The investment banking community has shown little interest in handling the share sale of little-known state-owned company KIOCL Ltd. Last month, the Centre had floated a request for proposal (RFP) inviting investment bankers. Sources say no bank was keen to bid, forcing the government to nudge IDBI Capital to submit a bid. “The government holding in KIOCL is 99 per cent. The current secondary market price isn’t the right indicator of valuation given negligible float. Bankers could have given the issue a miss fearing that they would have had to do the share sale around the current price,” said an industry player.        
      
Samie Modak
 
Grey market action in Indiamart
 
Shares of Indiamart Intermesh are changing hands at a premium of 10 per cent in the grey market ahead of its public offer, said market observers. Indiamart’s Rs  475-crore IPO is the first one to hit the market after a gap of two months. The company has priced its issue at Rs 970 to Rs  973 per share. Indiamart is the country’s leading online business-to-business marketplace. At the issue price, the company will be valued at Rs  2,782 crore. Industry players say the success of the issue will help improve primary market sentiment. Owing to volatility in the secondary market, many issuers have held back their IPO plans.
 
Sundar Sethuraman