SKINDIA INDIAN GDR MONITOR
Volume VI No 41	Oct 08-Oct 14, 1999	15-Oct-99

Skindia GDR Index slips: This week the markets resumed trading on a distinctly buoyant note with the Skindia GDR Index touching its 52-week high at 982.49 on Oct 08 & the BSE sensex trading above the 5000 mark. The news of the army coup and dismissal of Nawaz Sharif government in Pakistan disturbed the markets and the Skindia GDR Index fell sharply by 3.4% on Oct.13. Although the correction did not last for long as investors overruled any immediate escalation of tension between India & Paksitan. The formation of a new BJP led NDA government and Yashwant Sinha back as Finance minister too was seen as a positive step towards continuation of economic reforms and liberalisation. Over the week the Skindia GDR Index lost 18.90 points while the BSE sensex gained 112.29 points. During the week the average premiums of the 63DRs fell down to 2.82% on Oct 14 from 8.15% on Oct 08 & the average spreads of the 40 most actively traded DRs narrowed to 7.07% on Oct 14 from 7.62 on Oct 08. Reliance Petroleum Ltd lists its GDRs without making any IPO. Reliance Petro has gone in for a forced conversion of its outstanding $100m foreign currency convertible bonds (FCCBs) into global depository receipts. The converted GDRs have been listed on the Luxembourg Stock Exchange & will be availabe for trading within the next few days. Its FCCBs with a a face value of $5000 each have been converted into 1,000 GDRs at $5 each. One GDR represents 15 underlying shares of RPL with a conversion price of Rs 15 per share. RPL benefits from the conversion of outstanding bonds into equity, by saving around $16m in interest cost for the next two years, and about $100m in cash outflows arising out of redemption of the principal amount of these bonds. It will also strengthen the company's debt: equity ratio to 0.9:1 and will result in widening of the base of international investors in the company. RPL FCCB's raised in August 1996 at an interest rate of 7.84% were to be redeemed at par in August 2001. The 'call option' on the bonds was excercisable between Aug.14, 1999 and August 14, 2000. Another refinery company from India, Indian Oil Corporation too is planing for its GDR offer. Silverline Ind to raise $75m via ADRs: Software services company, Silverline Industries Ltd has formulated plans to float a $75m issue of American Depository Receipts. The company is targeting a profit of Rs 78 crore on a turnover of over Rs 300 crore in 2000-01 mainly through acquisitions. As per company sources the company is acquiring US based Silverline Technologies Inc. & renaming itself as Silverline Technologies. STI acquisition would cost SIL around 46.25m. It proposes to fund this acquisition through a preferential allotment of 4.5million shares at Rs 445 each to its US based sister concern Silverline Holdings Corp which holds more than 51% in Silverline Industries. Post acquisition SIL's earnings per share would go up to 12 from 10.1 & the holding company's stake in the Indian arm would increase by 3-4 per cent from the present 62%.

DISCLAIMER : Factual material is obtained from sources believed to be reliable and SkindiaFinance is not responsible for any errors and omissions contained herein. Any recommendation contained in this report may not be suitable for all issuers.