National Mineral Policy 2006 - Department of Mines
National Mineral Policy 2006 - Department of Mines National Mineral Policy 2006 - Department of Mines
(ii)(iii)only. Such funds have not set up shop in India yet, due to lack ofopportunities.Growth capital: Providing capital to existing companies for expandingtheir operations. The typical size of the investment is in the range of US$ 5million to US$ 20 million. Growth capital accounts for almost 80 per centof the investments made in India. 2 Some of these investments have goneinto listed metal companies.Buy-out: This involves buying out the existing shareholders so that theprivate equity investor takes the management control.7.9 The private equity market can open up to Indian exploration/prospecting companies ifenough opportunities arise to encourage global commodity/mining funds to start looking atinvesting in the country. The key issue for developing this market will be a regulatoryscenario that promotes the following:(i) Exploration/prospecting as a stand alone opportunity, so that Indian andglobal entrepreneurs are tempted to take up the activity on a much higherscale than at present;(ii) A clear, transparent, and time-bound road map for anexploration/prospecting company so that they can, upon finding anddeveloping an attractive ore reserve, either graduate to the next stage ofmining or are able to sell their equity/deposit to other mining companies.7.10 The private equity industry is still in its infancy in India and, if the right environmentis provided, it can attract foreign equity funds to set up shop in the country. The classical USmodel, along which lines the private equity funds can be expected to grow, is well suited forthe risk–return profile of prospecting ventures and mining companies. Here medium- to longtermfinance is provided in return for an equity stake in potentially high growth unlistedcompanies. This basically means investment in companies that require growth or expansioncapital and buy-out and is the type of investment that can go to mining companies that buydata and MLs from prospectors, sometimes along with a buy-out of the company itself.Venture capital, which is a separate segment of private equity and implies inter alia2 Source: Business World, 27 March 2006.140
investment in early stage companies, is appropriate for prospecting companies. Most privateequity firms are structured as specialist funds which do private investment in either thegrowth or the buy-out phases.Indian Stock Exchanges7.11 The Indian stock markets have gone through rapid changes in the past few years andthe listing norms of stock exchanges have also been revised. Guidelines for Initial PublicOfferings (IPOs) by unlisted companies issued by the Securities and Exchange Board of India(SEBI) (Disclosure and Investor Protection Guidelines) include the following:a. The company has net tangible assets of at least Rs. 3 crores in each of the preceding 3 fullyears (of 12 months each), of which not more than 50% is held in monetary assets:b. Provided that if more than 50% of the net tangible assets are held in monetary assets, thecompany has made firm commitments to deploy such excess monetary assets in itsbusiness/project;c. The company has a track record of distributable profits in terms of Section 205 of theCompanies Act, 1956, for at least three (3) out of immediately preceding five (5) years;d. Provided further that extraordinary items shall not be considered for calculatingdistributable profits in terms of Section 205 of Companies Act, 1956e. The company has a net worth of at least Rs. 1 crore in each of the preceding 3 full years(of 12 months each);f. In case the company has changed its name within the last one year, at least 50% of therevenue for the preceding 1 full year is earned by the company from the activitysuggested by the new name; andg. The aggregate of the proposed issue and all previous issues made in the same financialyear in terms of size (i.e. offer through offer document + firm allotment + promoters’contribution through the offer document), does not exceed five (5) times its pre-issue networth as per the audited balance sheet of the last financial year.An unlisted company not in compliance with the above guidelines can still undertake an IPOif the issue is made through the book-building process and at least 50 per cent of the offer isallotted to the Qualified Institutional Buyers (QIBs) or if financial institutions (FIs) and bankssubscribe to at least 15 per cent of the issue and another 10 per cent is allotted to QIBs. In141
- Page 100 and 101: 3.41 Recognising the need to make t
- Page 102 and 103: Figure 3.3: Public Hearing/NOC from
- Page 104 and 105: Chapter 4Infrastructure Needs and F
- Page 106 and 107: 4.5 Logistics is the key to access
- Page 108 and 109: Table 4.1: Mineral Production in In
- Page 110 and 111: necessary, therefore, that in infra
- Page 112 and 113: to the ports of Haldia and Paradip
- Page 114 and 115: Connectivity of Major Ports, brough
- Page 116 and 117: (iv)(v)(vi)(vii)At Visakhapatnam Po
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- Page 120 and 121: such an arrangement, the Ministry o
- Page 122 and 123: developed, controlled, and run by s
- Page 124 and 125: subject to overt and covert restric
- Page 126 and 127: consideration to the end use of the
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- Page 130 and 131: Chapter 6Augmenting State Revenues(
- Page 132 and 133: the value addition question conside
- Page 134 and 135: In a system of ad valorem rates of
- Page 136 and 137: must provide revenues sufficient to
- Page 138 and 139: Box 6.1: Methods of Valuation of Ro
- Page 140 and 141: Another point to be borne in mind b
- Page 142 and 143: ailable, cognisable criminal offenc
- Page 144 and 145: e worked out. This should be string
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- Page 148 and 149: Table 7.2: Minimum Listing Requirem
- Page 152 and 153: addition, the minimum post-issue fa
- Page 154 and 155: and hence this ore should be conser
- Page 156 and 157: miners distort the market for their
- Page 158 and 159: 7.22 The current law does not make
- Page 160 and 161: is mostly of low grade magnetite. H
- Page 162 and 163: Most magnetite findings are entirel
- Page 164 and 165: in UK 206 kg, and in China it grew
- Page 166 and 167: metres. The use of down hole drill
- Page 168 and 169: 7.42 Despite the fact that SME mini
- Page 170 and 171: also be a consideration. However, t
- Page 172 and 173: price, reduce profitability, and pu
- Page 174 and 175: IMPACT ON DOMESTIC IRON ORE PRICES
- Page 176 and 177: 7.58 Export of iron ore fines on a
- Page 178 and 179: POLICY ON BEACH SAND MINERALS7.64 B
- Page 180 and 181: not contain more than 0.1 per cent
- Page 182 and 183: 7.73 On 18 January 2006, the DAE no
- Page 184 and 185: with the Centre is mainly to ensure
- Page 186 and 187: India enterprise) reported that the
- Page 188 and 189: chloride process pigment technology
- Page 190 and 191: are disposed of in the mined-out ar
- Page 192 and 193: directed to ensure that the AERB/AM
- Page 194 and 195: would have to be carefully drafted
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(ii)(iii)only. Such funds have not set up shop in India yet, due to lack <strong>of</strong>opportunities.Growth capital: Providing capital to existing companies for expandingtheir operations. The typical size <strong>of</strong> the investment is in the range <strong>of</strong> US$ 5million to US$ 20 million. Growth capital accounts for almost 80 per cent<strong>of</strong> the investments made in India. 2 Some <strong>of</strong> these investments have goneinto listed metal companies.Buy-out: This involves buying out the existing shareholders so that theprivate equity investor takes the management control.7.9 The private equity market can open up to Indian exploration/prospecting companies ifenough opportunities arise to encourage global commodity/mining funds to start looking atinvesting in the country. The key issue for developing this market will be a regulatoryscenario that promotes the following:(i) Exploration/prospecting as a stand alone opportunity, so that Indian andglobal entrepreneurs are tempted to take up the activity on a much higherscale than at present;(ii) A clear, transparent, and time-bound road map for anexploration/prospecting company so that they can, upon finding anddeveloping an attractive ore reserve, either graduate to the next stage <strong>of</strong>mining or are able to sell their equity/deposit to other mining companies.7.10 The private equity industry is still in its infancy in India and, if the right environmentis provided, it can attract foreign equity funds to set up shop in the country. The classical USmodel, along which lines the private equity funds can be expected to grow, is well suited forthe risk–return pr<strong>of</strong>ile <strong>of</strong> prospecting ventures and mining companies. Here medium- to longtermfinance is provided in return for an equity stake in potentially high growth unlistedcompanies. This basically means investment in companies that require growth or expansioncapital and buy-out and is the type <strong>of</strong> investment that can go to mining companies that buydata and MLs from prospectors, sometimes along with a buy-out <strong>of</strong> the company itself.Venture capital, which is a separate segment <strong>of</strong> private equity and implies inter alia2 Source: Business World, 27 March <strong>2006</strong>.140
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