India gets a new realty index

On Tuesday, Infrastructure Development Finance Co. Ltd (IDFC) and the FTSE Group which is owned by The Financial Times of London and the London Stock Exchange launched an infrastructure index which will keep an eye on the performance of 63 companies.

The index features companies in transportation, infrastructure like roadways, railways and aviation; power generation, communications infrastructure and would also include those involved in water supply as well. Firms have to be listed on either the Bombay Stock Exchange (BSE) or the National Stock Exchange (NSE).

It is estimated that in the next few years India will invest as much as $320 billion on infrastructure. Rajiv Lall the managing director of IFDC said last afternoon that the 63 companies have grown at an average compounded annual growth (CAG) of 58% as opposed to 25% growth posted by the NSE and BSE.

Flag Tele listing on LSE soon

ADAG is expecting to recover ten times the value paid for buying the company in 2002.

Flag Telecom, a 100 per cent subsidiary of Reliance Communication (RComm), has mandated Goldman Sachs and Deutsche Bank as lead managers for the maiden initial public offering (IPO) on the London Stock Exchange.

Top sources say the bankers have valued the company at $2 billion. The IPO will be completed in the next three months. The company will divest 10-15 per cent of its equity through the IPO.

Through the IPO, the Anil Dhirubhai Ambani Group (ADAG), will be able to recover virtually ten times the value it paid for the company in 2002. It had paid $211 million to buy Flag.

Flag, which runs an international fibre bandwidth all across the globe, has announced an investment of Rs 7,000 crore to set up a new generation network which will provide high speed transmission. The cash from the IPO will be used to partly finance the ambitious project which is expected to be up and running by 2009. The new network will link to the Mediterranean to Greece, Cyprus, Turkey, Malta, Libya and Lebanon, Trans-Pacific to the US and Japan, Far East and Africa.

The 65,000 km cable network connects 40 countries across four continents and has over 200 international telcos and Internet service providers (ISPs) as its clients.

Flag has also recently completed Falcon, a $400 million fibre project which links West Asia to the rest of the world.

Flag Telecom is the second company of the Anil Dhirubhai Ambani Group after Reliance Energy which is being listed on the London Stock Exchange. Over 25 Indian companies are already listed on LSE which include ACC, Amtek Auto, Crompton Greaves, GAIL just to name a few.

A Reliance Communications spokesperson, however, declined to comment on the issue.