The Indian capital markets continue to heat up and Hindalco Industries, the fifth largest aluminium producer in Asia in terms of volume, is the latest company to take advantage of a surge of interest in Indian equity to fund the development of its aluminium production facilities and access to mineral reserves. “At the end of the day this deal was US$600m but people on the team realised that they could have had a much larger deal if they wanted to,” said Manoj Bhargava, of counsel at Jones Day.

The law firms worked steadily to overcome the challenges presented by the international company. “One issue that always comes up is the size of the company and its operations. Hindalco has businesses everywhere, so as a result we are doing due diligence, reviewing documents and talking to management in a number of countries in four continents,” said Bhargava.

Settlement of the placement agreement also required weeks of negotiation considering the number of parties involved and the significant deal amount. “There are also added sensitivities that have come on board since 2008. People have become more cautious and the risk management has become more rigorous,” said Bhargava. “As a result we had to spend significant amounts of time talking to Amarchand & Mangaldas and Hindalco to make sure that they were comfortable with what we were requesting and that they could provide what we were requesting from a legal perspective.”

Hindalco did not engage international legal counsel and, as significant subsidiary Novelis is headquartered in North America, Jones Day stepped up to assist the company with US legal issues that arose during the course of the QIP.

Bhargava expects that activity in the Indian capital markets will continue well into 2010. Jones Day already has ten similar deals in the pipeline, one of which is an IPO of Godrej Properties, a premier real estate development company in India.

*The placement agents were: Citi, Deutsche Equities, Merrill Lynch, HSBC Securities, RBS Equities, SBI Capital and UBS Securities

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